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Political Risk Insurance

Coverage 

Policy coverage for losses due to political action and instability, including:

  • Confiscation
  • Expropriation or Nationalization
  • Currency Inconvertibility and non-transfer
  • Political violence (including terrorism and war)
  • Contract frustration due to political events
  • Sovereign payment default
  • Wrongful calling of on-demand guarantees and bonds

Project Finance Risk Insurance: comprehensive coverage for commercial lenders on loans to limited
recourse projects

 

Structured Credit Insurance for commercial lenders on medium term trade and non-trade transactions

Available Limits

Financial Institutions and Capital Markets: $150 million, non-cancelable policy terms up to 15 years for sovereign credit risk or lender PRI cover on private sector transactions. Up to $75 million and up to 10 years for Structured Credit insurance. Up to $150 million and up to 25 years for Project Finance loan insurance.

 

Equity Investors: Up to $150 million per country, with terms of up to 15 years, covering up to 100 percent of the investment value.

 

Importers and Exporters: Up to $150 million in any one country, with policy terms up to 15 years. Coverage is available for up to 95 percent of a contract’s value.

 

Contractors: Up to $150 million per country, with policy terms up to 15 years for mobile asset coverage. Coverage is available for up to 100 percent of asset replacement value.

 

Wrongful Call of Guarantee Insurance can indemnify the Insured for up to $150 million in any one country, with policy terms of up to 10 years. Coverage is available for up to 95 percent of the value of each bond
or guarantee.

Capacity

See above

Minimum Premium

USD 20,000 (depending on product type)

Minimum Retention 

Varies by coverage type

Minimum Deductible

Except for Political Violence, typically 1% of insured amount Global

Notable Exposures

Global

Targeted Classes/Industries

Depends on specifics of the transaction

Targeted Geographies

Most locations except OFAC countries

Excluded Classes/ Industries

N/a

In a volatile world, we put stability and experience on your side. AIG’s Political Risk Insurance helps investors, financial institutions, and corporate clients protect overseas investments against unpredictable losses from a wide range of political perils. While others step in and out of the market, you can count on us to stay, year after year, tailoring the protection clients need. Whether it is a foreign government’s action or inaction, a political uprising or currency inconvertibility, if it threatens a client’s overseas property, income or assets, we can address it.

 

We specialize in crafting insurance expressly for the political risks of:

  • Equity Investors. Changes in government or government policy can place a multinational’s physical assets and investments at risk of expropriation or political violence. And if local economic priorities shift, a company with overseas investments can find it difficult to repatriate profits, intra-company fees or dividends.
  • Financial Institutions & Capital Markets. While emerging market transactions can offer higher potential margins, they also present significant levels of country risk linked to trade finance, project, asset backed, and working capital loans as well as bank inter- branch lending.
  • Importers and Exporters. Doing business with customers and governments overseas involves numerous potential risks, including the inability to convert and transfer currency. Moreover, the performance of private in-country counterparties can be impacted by unforeseen political perils, such as confiscation, political violence, or license cancellation.
  • Contractors. The specialized mobile assets and equipment required on overseas project locations can present substantial, unique exposures. Local governments may seize a contractor’s assets; assets can be damaged by political violence or equipment may be left behind if a contractor is forced to evacuate a country in turmoil. Contractors also face the risk of non-payment on contracts with foreign counterparties.
  • Policies are customized for the diverse political perils of today’s world, including:
    • Confiscation, expropriation, and nationalization
    • Currency inconvertibility/non-transfer
    • Political violence (includes terrorism and war)



Very comprehensive range of products for corporate clients and financial institutions.

 

AIG has been in the political risk business longer than most of our competitors.

 

Our teams of underwriters are among the most experienced in the market.

 

We are able to tailor coverage based on our clients’ needs.
 

 

A proven track record of 40 years of paying claims as well as managing recoveries.

 

We were the first private insurer to be admitted to the Berne Union.

Interested in Political Risk Insurance?