Ironshore will enhance its current representations and warranties insurance for merger and acquisition transactions by providing supplemental coverage for certain political risks
which may arise in a number of volatile territories.
Brazil's rating was downgraded; political risks
have been increasing from moderate levels as economic weakness has increased the role of the government in the economy.
This, according to the latest Marsh Risk Management Research briefing, Social Media Heightens Political Risks
in Emerging Markets, means that the Cyrear view mirror' approach to risk management, which is frequently used by multinationals to forecast risk by examining past events, is no longer sufficient when operating in at-risk countries.
Companies with global investments, global markets or global supply chains need to undertake a process of identifying their political risks
and deciding how to mitigate them, Wilkin suggests, using a five-step process.
For example, "the current iron ore rush in Liberia, Sierra Leone and Guinea is seeing South African companies pouring idle plant and machinery into the region," says Tracy de Kock, manager: New Business, Credit and Political Risks
at Alexander Forbes.
This book focuses on understanding the political risks
of various international regions, how PRI comes into play, and what agencies oversee its costs and uses.
Moreover, some political risks
may be related to the behaviours of MNEs, which cannot be forecast depending on external political risk
So what constitutes the political risks
faced by companies operating away from their home territory?
Rapidly increasing globalization poses a common challenge--how to integrate the social and political risks
of government instability, political corruption, business corruption, child labour practices, anti-corporate sentiment, terrorism, environmental pollution, and others, into management decisions.
Companies occasionally experienced reductions in revenue or operating losses resulting from political risks
associated with regime change, social unrest, debt defalcation or currency devaluations.
can shift rapidly, disrupting business and leading to unexpected losses.
Abmed Riahi-Belkaoui attempts to identify the sources of these political risks
as well as provide frameworks for estimating and managing them.