Political risk insurance


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Political risk insurance

The risk associated with possible negative events such as expropriation of assets, changes in tax policy, restrictions on the exchange of foreign currency, or other changes in the business climate of a country.

Political Risk Insurance

An insurance policy protecting the policyholder from the risk that a foreign government will significantly alter its policies or other regulations so that it results in a loss for one's investment. It may also cover the risk that a nation will refuse to comply with an agreement to which it is a party, or that political violence will hurt an investment or business. For example, if one exports goods to a foreign nation, and that nation elects a new government that enacts protectionist tariffs, this will negatively impact the export business. Political risk insurance may be tailored to the policyholder's specific needs.
References in periodicals archive ?
The beauty of political risk insurance is that it is available in more than 150 countries including high-risk markets such as Afghanistan, Iraq, Democratic Republic of Congo and Rwanda.
As well, DIFC will, in the course of its operations, identify and refer to MIGA enterprises and projects in the region seeking foreign financing that could benefit from political risk insurance (PRI) coverage.
Not the proponents nor those who underwrite a mineral development project through political risk insurance (such as Export Development Canada or the World Bank's Multilateral Investment Guarantee Agency among others) as one might assume at first blush.
In countries where MD International has not been able to get political risk insurance "we are out of the picture," Morales-P6rez says.
Companies take out political risk insurance when exporting or investing overseas to cover themselves against financial losses resulting from specified political events," says Chang Foo, head of product management and risk transfer at EFIC.
Political risk insurance can help protect a company's balance sheet against write-offs for the nonperformance of contracts due to political events.
One prime step lies in buying political risk insurance.
He or she must consider both commercial risk insurance and political risk insurance.
OPIC), which provides political risk insurance and finances loans and loan guarantees from U.
WASHINGTON -- The first political risk insurance contract for a Reduced Emissions from Deforestation and Degradation (REDD) project, provided by the Overseas Private Investment Corporation (OPIC) to Terra Global Capital for a project in Cambodia, has been awarded the Sustainable Forestry Transaction of the Year by Environmental Finance magazine.
A political risk insurance policy is introduced by HDFC ERGO General Insurance Company, whereby companies functioning internationally will be safeguard against arbitrary government actions and their investments protected.
The number of captive insurers writing political risk insurance has nearly doubled from 2013 to 2014, due to increased interest from multinational companies who are self-insuring.

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