As more companies expand internationally, they risk cancellation of contracts as well as currency and political exposures. Political risk insurance, which provides coverage for adverse consequences of expansion, is an increasingly important tool for companies operating outside their native borders.
At the session, What's Your Political Risk Management Strategy, four speakers provided an overview of political risk coverage that examined underwriting standards, a comparison of private and public insurance markets and analysis of several developing economic regions. The speakers included Maura Garych Edgar, a senior broker for Johnson & Higgins' wholesale broker Henry Ward Johnson; William L. Mather, director, risk management for the Gillette Company; Julie A. Martin, deputy vice president of the Insurance Department of the U.S. government's Overseas Private Investment Company (OPIC); and Geoffrey Lynch of Hiscox Group, a Lloyd's syndicate underwriter.
Surprisingly, the location of the country where a project is based is not a primary consideration in evaluating a company's political risk, according to these speakers. …