The London-based International Underwriting Association (IUA) has set up a London Market political risk committee for the insurance and reinsurance sector. The group is made up of underwriting and claims representatives from across the association’s member companies and will meet regularly to discuss issues affecting political risk business.
The IUA said that the group has already hosted its first meeting and drawn up a list of future work items that includes considering financial guarantees, redenomination of currencies, international sanctions, licensing requirements and taxation. The committee also intends to discuss the greater use of verticalised markets, as opposed to subscription risks, and claims trends.
Political risk is interpreted by the IUA broadly to mean 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.
The political risks committee will consider both technical underwriting and claims aspects of doing business across different jurisdictions and industries.
“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 with individual firms,” said Chris Jones, IUA director of market services and secretary to the new committee.
“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.
“Our market briefings discussing political risk topics have regularly been amongst the most popular events in the IUA calendar and the initial response from members has demonstrated a clear enthusiasm for this new initiative. Already the committee has representatives from the majority of companies writing political risk business in the London company market.”
Future meetings of the IUA Political Risks Committee are planned every second month. Membership is open to any practitioners working for the association’s member companies and actively involved in underwriting or claims handling such business.
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