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Credit & Political Risk

Organisations with international operations are exposed to counterparty and country risks in the course of their daily business. The diversity of Marsh's client base reflects the fact that all balance sheets can benefit from the leverage and protection given by structured use of credit and political risk insurance. Niche operators and global leaders come together from the community of international banks, commodity traders, exporters, investors, manufacturers, plant and equipment operators and overseas retailers for whom we act.

Marsh has been a leader in political risk insurance since the advent of the market in the early 1980s and enjoy strong relationships with all insurers in this sector. At any one time we manage upwards of US$40 billion of insurance capacity and we have had extensive success in collecting claims on our client's behalf.

The insurance contracts we arrange relate to a wide variety of transactions brought about by our diverse client base and we also offer a range of risk consulting services.

 

Credit & Political Risk – Insurance

The insurance contracts we arrange relate to a wide variety of transactions brought about by our diverse client base.  In general terms this exposure can be described as:

  • Credit and/or performance risk on government owned and/or private counterparties. Whilst key for traders and exporters, this product is of increasing interest to banks as Marsh's credit insurance policy has been confirmed as meeting the requirements of an effective risk mitigant in the context of the Basel II agreement;
  • Investment risk, often referred to as 'country risk', and characterised by concepts such as confiscation, expropriation, nationalisation, deprivation, currency inconvertibility, war risks and other political force majeure including forced abandonment and breach of contract by a host government. This is of particular interest to companies involved in the extractive industries, together with infrastructure projects, manufacturing industries and global retail or distribution;
  • Fixed asset risk, which can be insured on a similar basis to investments or as an adjunct to a standard property 'all risks';
  • Mobile asset risk, whether in relation to mobile plant and equipment or stocks of commodities and other moveable assets. Similar cover to that used for investment risk is adopted although with specific adaptations depending on the nature of the assets insured;
  • Contract risk, often referred to as contract frustration where the performance of a contract might be frustrated by political force majeure. This product is often tailored to include cover in respect of credit risk and on demand bond risk;
  • On demand bond risk, where an exporter or contractor is required to provide a bid, advance payment, performance, retention or warranty bond and there is the risk that the beneficiary might execute the bond outside the terms of the underlying contract or as a result of political force majeure. Banks issuing bonds on behalf of clients may insist on this cover being put in place or indeed may require credit risk insurance on their customers applying for such bonds;
  • Business interruption or trade disruption risk

 

Credit & Political Risk Consultancy

In addition to the services offered as a specialist credit and political risk insurance broker, Marsh's Credit and Political Risk Team also offers risk consultancy services:

  • Country reports - these are detailed analyses of the political, cultural, operational, security and economic risks in any region.
  • Country portfolio review - a review of your business assets showing how high concentrations in high-risk countries can affect your portfolio.
  • Portfolio risk modelling - a model of your business' risk profile identifying the likelihood of any credit default loss.

 

World Risk Review - For effective risk management

The World Risk Review is a free information service provided by Marsh to help corporations, banks and other organisations involved in international trade. It provides short to medium term assessment of the level of risk associated with a range of political and economic perils that could cause financial loss and is the most comprehensive risk assessment tool of its type.

The World Risk Review - your advantage

By monitoring 53 international sources of independent, verifiable data and expert advice from a distinguished advisory board we rate 197 countries and territories using nine perils under the broad categories of Political Violence, Trading Environment and Investment Environment.

This gives you a far deeper insight into a country than is available from many other assessment tools which, using a sovereign credit or political violence-based approach, only provide single risk ratings. World Risk Review - putting you in control

The World Risk Review gives you greater control. From assessing threats to defining the most effective mitigation strategies, it is the indispensable tool for all stages of your risk management.

The World Risk Review is free to clients and prospective clients through subscription. It is regularly updated and supplemented by frequent bulletins and newsletters, providing key insights and analysis of individual countries or regions. Register here and benefit from an invaluable risk assessment service free of charge.

 

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Marsh Ireland Brokers Limited, trading as Marsh Ireland, Bowring Marsh, Charity Insurance, Echelon Claims Consultants, Guy Carpenter & Company, ILCS, Insolutions, JLT Ireland, Lloyd & Partners, Marsh Aviation Consulting, Marsh Claims Management Services, Marsh Claims Solutions, Marsh JLT Specialty, Marsh Reclaim, Marsh Risk Consulting, is regulated by the Central Bank of Ireland.. Marsh Ireland Brokers Limited is a private company limited by shares registered in Ireland under company number: 169458. VAT Number IE 6569458D. Registered Office: 25-28 Adelaide Road, Dublin 2, Ireland, D02 RY98.

Directors: T Colraine (British), A J Croft (previously Kehoe), P G Dromgoole (British), J Flahive (British), J C Grogan, P R Howett, C J Lay (British), S P Roche, R I White (British).