Our insurance brokers’ approach to risk management solutions helps you to achieve the right level of insurance cover.
Choosing Gallagher gives you access to local expertise backed by international experience that will help protect your business and let you focus on what you do best.
View our expertiseOur insurance brokers’ approach to risk management solutions helps you to achieve the right level of insurance cover.
view our broker servicesOur insurance brokers’ approach to risk management solutions helps you to achieve the right level of insurance cover.
Our experts can give you the advice you need across a variety of different services.
View our servicesWe take the time to get to know your business and our specialists have expertise in all industries. We then tailor insurance and risk management advice and solutions to match your specific needs.
CONNECT WITH AN EXPERTFind out the latest information and research from our experts to help keep your business safe.
View allIn the Business Insurance & Risk Market Update H1 2022 report, our experts provide market insights and offer guidance to help you ensure your business has the right protections in place.
Get the reportFor more than 90 years, we’ve helped businesses face their future with confidence. Hear more about our story and how our experience can help you.
View allTapping opportunities in foreign countries calls for careful balancing of what can be achieved with what might go wrong – and planning for both.
While today’s emerging economies are expected to become economic powers in the future and some frontier economies to become significant players, planning for volatility is essential when entering these markets.
For enterprises seeking to establish cross-border businesses where opportunity exists alongside geopolitical factors, planning strategy needs to include scanning, evaluating and adapting to risks that may take unexpected forms.
Using past history for modelling and forecasting outcomes is often insufficient and can even be misleading. Sophisticated data analysis gave Donald Trump a 15% chance of winning the United States presidency in 2016!
Instead businesses should assess the target country in terms of the political, economic and social influences. Are there signs of political instability? Is the infrastructure adequate to support your needs? Is there access to financing and unobstructed channels for repatriating currency? Are there inflation and debt economic concerns? Are there corruption issues to be dealt with?
As well as looking at external factors, an organisation needs the capability to spot, evaluate and manage political challenges to their enterprise. What might a change in political leadership of the target country mean in terms of
How can a business best plan or prepare to deal with impacts on the economy, regulations, stability and its own risk mitigation arrangements?
Dr Jason Thomas, Director, Frontier Investments, an organisation that provides field assessments, strategic guidance and implementation plans in key locations, says success is more likely to be achieved through a continual cycle of risk adaptation, rather than fixed processes.
His suggestions for navigating volatile, uncertain, complex and ambiguous environments involve understanding the influences at work and responding appropriately. Factoring these into your planning strategy can help businesses effectively deal with the prevailing conditions. Rather than remaining locked into conventional risk management solutions, foster the agility to meet challenges as the environment changes.
These influences should be key areas of focus for businesses considering investment in any foreign country. Political risks can arise everywhere. The key components are
Since eliminating risks entirely isn’t feasible in many environments that also offer business opportunities, an adaptable strategic approach is the key to agility. Some pointers include
The underlying drivers of political risk usually flow from people. This can be at the project, business or country level.
Consider how to better make use of the people across your network. This requires constantly working by, with and through leadership at all levels to build reciprocal relationships. Networks outside your own system could provide the clearest indications of emerging risks ahead.
Learning how to manage known and unanticipated risks political risks enables you to prepare for surprise and to recognise opportunities that may arise from the changing conditions. Capitalising on those opportunities requires the right approach, backed up by offsetting your risk exposures ‒ and that is where insurance has a key role to play.
“Political risk is one of the major headaches faced by multinational businesses involved in cross-border investments,” says Gallagher National Head of Credit, Surety & Political Risks Racheal Tumelty, naming Africa, Latin America and some areas of the Middle East as regions prone to rapid fluctuation.
Foreign government intervention can affect investors’ liquidity, assets, ability to source materials, secure and manage contracts with manufacturers and set terms of trade. Other risks include civil unrest or war, violence, forced abandonment and currency transfer blockage. Bear in mind that legal recourse or compensation may not be accessible, she warns.
Political risk insurance is designed to protect your offshore projects, investments or funds flow and the Gallagher political risks team is a leading specialist in country risk, well positioned to provide insurance solutions and advice to a broad range of organisations and industry sectors.
So before you venture into investing in offshore project do your research, establish your relationship networks, put your risk management program in place and be prepared to seize and run with opportunities.
Find out more about our political risk advice and insurance solutions
Political risk insurance
Corporate travel insurance