Global insurance and reinsurance broker Willis Towers Watson has announced the launch of a unique political risk insurance program supported with over $1 billion of market capacity.
The new program is targeted at large global clients who may have existing assets or are considering future investments overseas.
It is supported by VAPOR (Value at Political Risk), a modelling and analytical tool developed in partnership with Oxford Analytica, which translates geopolitical risk assessments into actionable analysis, based on a proprietary algorithm.
This tool will enable companies to assess and calculate the financial implications of political risks regionally, globally, by industry sector, and over time, WTW explained.
“The geopolitical landscape remains extremely volatile and inherently difficult to predict,” said Andrew van den Born, Managing Director of Financial Solutions at WTW.
“The rise of populism along with the spread of protectionist agendas and the decline of multilateralism across both emerging markets and in the developed world, represent a significant threat to global trade.”
“The risks that evolve from these political dynamics can have a potential catastrophic impact on our clients’ investments,” van den Born continued.
“The combination of our cutting-edge risk data analytics and the facilities’ programme’s market leading coverage capabilities will better enable our clients to make more informed investment decisions and allow them to plan and grow their business with confidence in an increasingly unstable environment.”
VAPOR is designed to anticipate where unexpected market exposure will emerge, and where headline risk may conceal opportunities for well-prepared organisations.
It measures political risk across more than 160 countries, against a suite of six political risks across 14 industry sectors.
Alastair Swift, Head of Corporate Risk and Broking, GB at WTW, also commented: “Geopolitical risk is an increasing concern to our clients who are seeking new ways to assess and mitigate these risks.”
“Additionally, there is increasing demand from corporate shareholders, investors and lenders for companies to articulate transparently their strategy to manage these exposures,” Swift explained.
“To meet these requirements, a consistent and vigorous risk quantification methodology and thorough evaluation of available risk transfer opportunities will be needed. This programme is specifically directed towards meeting these demands.”
