Political Risks

Backed by more than 30 years of experience, AIG can provide tailored coverage that addresses the risks specific to your markets and line of business.

While political climates may shift and credit markets may change, with AIG, your coverage will remain non-cancellable and secure.

In today’s global market, most companies are aware of the potential benefits associated with leveraging opportunities in developing and emerging markets. However, they are also aware of the risks associated with operating in a foreign country and under a foreign jurisdiction. There are good reasons why some companies are uncomfortable with taking on the risks associated with doing business in emerging markets.

These risks may include:

Failure and non-payment of a sovereign, sub-sovereign or private obligors to honor payment obligations under a loan, guarantee, promissory note, bond or letter of credit
Seizure or confiscation by a foreign government leading to a loss of investment or asset
Inability to repatriate or convert currency earned in a foreign country
Politically motivated violence that results in property damage, or evacuation and repatriation of the local team leaving valuable equipment behind
Failure of a project company to honor its payment obligations to senior secured lenders pursuant to the terms of the loan agreement

Political Risk & Structured Credit Insurance helps corporates and financial institutions to lend, trade and invest with the confidence that risks in emerging and developed markets are mitigated. As well as limit and risk relief, through our credit protection products, we are also able to provide Basel III compliant non-payment policy to provide capital relief.

Product Details

AIG provides a full spectrum of Political Risk cover including non-payment credit insurance cover to financial institutions, investors, exporters, importers and corporate clients depending on political and credit risk needs. The 4 key products are:

Political Risk Non Credit (PRI)

Offers investors, exporters, importers and contractors cover against a wide range of political perils including confiscation, expropriation and nationalization, currency inconvertibility, political violence and war, as well as more specialised perils such as arbitration award default. Coverage can be provided for up to 15 years with a maximum limit of $150 million per any one program.

Political Risk Credit (CF)

Offers financial institutions and corporations comprehensive non-payment insurance against the failure of a sovereign or sub-sovereign counterparty to honour a guarantee, letter of credit, loan financing, or any other trade or non-trade payment obligation. Coverage can be provided for up to 15 years with a maximum limit of $150 million per any one risk.

Structured Credit (CR)

Offers financial institutions and corporations comprehensive non-payment insurance against private obligor payment obligations in a range of structures and geographies. Coverage can be provided for up to 10 years with a maximum limit of $100 million per obligor.

Project Finance (PF)

Offers senior secured lenders coverage for defined losses arising from a borrower’s failure to honour its payment obligations under a project finance loan. Coverage can be provided for up to 20 years with a maximum limit of $100 million per any one project.