Political risk is a growing industry, with a mushrooming of security specialists, consultants and insurers entering the fray in recent years. The growth in the market reflects the overall increase in awareness among companies and risk managers of the threat political risk poses to their businesses and investments, said Chris Parker, Head of Terrorism and Political Violence at Lloyd’s insurer Beazley.
The media attention on cyber risk reached new heights in March following a series of hacks on the banking system of South Korea, dubbed the world’s most wired economy, that are alleged to have emanated from North Korea.
The cost of insurance in the Middle East and North African (MENA) region remains low driven by high capacity from both local and international markets and as a result profitability is low. The market still promises huge long-term potential and tempting short-term growth rates above gross domestic product levels which themselves far outstrip rates in more mature economies such as Europe and the US.
A leading international insurance and reinsurance executive has warned his peers that they need to wake up to the reality of looming dark clouds that face the industry and fast to avoid a potentially disastrous lurch back into losses.