The International Underwriting Association (IUA) has established a new London market political risk committee.
The committee is made up of underwriting and claims representatives from across the IUA’s member companies and will meet regularly to discuss issues affecting political business risk.
Political risk is interpreted by the IUA as the probability of disruption of the operation of companies by political forces and events, whether they occur in individual host countries or the wider international environment.
It covers risks such as sovereign non-payment, exchange transfer, credit insurance, supply chain distribution, currency risk, legal and regulatory risk and government risk.
After its first meeting the committee drew up a list of future work items including considering financial guarantees, redenomination of currencies, international sanctions, licensing requirements and taxation.
The committee will consider both technical underwriting and claims aspects of doing business across different jurisdiction and industries.
Chris Jones, IUA director of market services and secretary to the new committee, said: “In the past the IUA has tended to look at political risk issues across our wide range of underwriting and claims committees, through compliance practitioner networks and on an ad hoc [basis] with individual firms.”
“Given the heightened political risks environment of recent years, however, it seemed appropriate to establish a dedicated group to focus on this class of business.”
