Extractive industries lead demand for credit and political risk cover - BPL Global

The oil, mining, metals and extractive industries continue to make up the most significant proportion of demand for specialist credit and political risk insurance coverage. This is according to data from broker, BPL Global, whose annual Market Insight report points to an increase in enquiries from OECD countries – a continuing development from historical demand for CPRI to cover emerging market risk, it said. This demand accounted for approximately 25% of the broker’s enquiry flow in 2019, with over 10% relating to deals where the US, UK or France were the underlying country of risk.

Further analysis of the broker’s live policies shows a 46% increase in its exposure to North America in 2019, which nearly doubled since January 2018 when it stood at US$1.35bn. Likewise, its exposure to Europe has increased to US$6.47bn. On the other hand, the broker’s exposure to Russia has decreased by approximately a third since over that period, reflecting the increasing impact of international sanctions on the market, it says.

Commenting on the findings of the report, managing director of BPL Global, Sian Aspinall says: “With many insurers now closed to any coal-related risk, and enquiries for renewables increasing, it will be interesting to see how this trend develops over the next few years. Certainly, we can expect the CPRI market to continue to diversify into new areas over the medium-to-long term.”

Banks and financial institutions continue to represent the bulk of claims collections since the 2008 global financial crisis, according to the data. Across the market as a whole, just over U$3bn across 486 claims were settled between 2007 and 2018.

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