The large political demonstrations taking place in major cities in Turkey and Brazil in June have not yet impacted the political risk insurance market, according to a report by Marsh last week.
“As of June 21, there had been no business losses reported in either country that would be likely to trigger political risk insurance claims. Insurers, however, are carefully monitoring the situation and their exposures in the regions,” the broker said in a research briefing
Looking ahead, however, Marsh said it surveyed leading political risk insurers on June 20, who indicated that they will likely become more selective of the risks that they insure, even though a lack of losses has kept pricing and overall availability of political risk insurance unchanged so far.
Trade credit insurers surveyed by Marsh are also watching for potential deterioration in either or both countries, Marsh said.
The briefing pointed to the turbulence in the two areas as a wakeup call for risk managers and insurers that they can’t try to pinpoint countries facing the greatest political and trade credit risks, noting that Brazil and Turkey have historically been considered “stable” by underwriters.
But as multinational buyers opt for broad, multi-country insurance policies, rather than separate country-specific political risk and trade credit insurance policies, Marsh notes that because the policies only cover insured property and assets, the approach needs used in conjunction measures to protect workers.
The briefing, Unrest In Turkey and Brazil, Risk and Insurance Implications, lists insurance coverages for workers and provides a checklist of risk management, communication and crisis management measures for businesses.