{"id":2434,"date":"2026-09-28T10:10:41","date_gmt":"2026-09-28T10:10:41","guid":{"rendered":"https:\/\/jenoa.com\/?post_type=news&#038;p=2434"},"modified":"2026-09-28T10:10:43","modified_gmt":"2026-09-28T10:10:43","slug":"political-risk-insurance-protecting-international-investments","status":"publish","type":"news","link":"https:\/\/jenoa.com\/en\/industry-q-and-as\/political-risk-insurance-protecting-international-investments\/","title":{"rendered":"\u00a0Political risk insurance: protecting international investments"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">International investment always comes with some uncertainty, but political events can create a very different kind of risk. A government can restrict the movement of money, take control of an asset or become unable to honour its contractual commitments. Political risk insurance gives investors protection against certain losses caused by these events and can also make it easier to secure financing for an investment.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-central-palette-4-color has-text-color has-link-color wp-elements-1\">What is political risk insurance?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Political risk insurance protects international investments against losses caused by political events or government actions. It can cover risks such as expropriation, restrictions on moving money out of a country, political violence and governments failing to honour their contractual commitments.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These risks aren\u2019t always covered by ordinary commercial insurance. Political risk cover is generally tailored to the investment and the country involved, taking into account the particular political risks an investor faces..<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-central-palette-4-color has-text-color has-link-color wp-elements-2\">What kinds of events does political risk insurance cover?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The main risks typically covered are:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Expropriation or nationalisation:<\/strong> when a government takes control of an investment or asset.<\/li>\n\n\n\n<li><strong>Currency inconvertibility and transfer restrictions:<\/strong> when an investor cannot convert local currency or move funds out of the country.<\/li>\n\n\n\n<li><strong>Political violence:<\/strong> losses resulting from events such as war, civil unrest, terrorism or politically motivated violence.<\/li>\n\n\n\n<li><strong>Breach of contract:<\/strong> when a government or state-owned entity fails to honour certain contractual commitments.<\/li>\n\n\n\n<li><strong>Cancellation of licences:<\/strong> in some policies, the unjustified withdrawal or non-renewal of an essential government licence.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The exact cover varies by provider and policy. Commercial failure, poor management and ordinary changes in market conditions are generally outside its scope. Events that occurred before the policy began, or risks that were already foreseeable when the policy was taken out, may also be excluded.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Political risk insurance is different from war risk insurance which focuses specifically on losses<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">from war and related dangers, while political risk insurance can cover a broader range of government and political risks.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-central-palette-4-color has-text-color has-link-color wp-elements-3\">Why do international investors need political risk insurance?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Political events can create losses that have little to do with how well an investment itself is performing. A profitable project can still be affected if a government restricts currency transfers, takes control of an asset or refuses to honour an agreement. Companies investing in infrastructure, energy, manufacturing, natural resources or other long-term projects where capital is committed for years, should pay particular attention.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-central-palette-8-color has-text-color has-link-color wp-elements-4\">Which markets carry the highest political risk?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Markets with weaker institutions, political instability, conflict or restrictions on capital movement generally present greater political risk. UNCTAD (United Nations Conference on Trade and Development) highlights developing countries and least developed countries, where perceived and actual risks can discourage foreign investment.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That doesn\u2019t mean every investment in an emerging market is high risk, or that developed markets are risk-free. Political risk can arise in any jurisdiction, and the decision to insure an investment depends on its specific exposure and the insurer&#8217;s assessment of the risk.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-central-palette-4-color has-text-color has-link-color wp-elements-5\">Who provides political risk insurance?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Political risk insurance is provided by export credit agencies, multilateral institutions and private insurers.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-central-palette-8-color has-text-color has-link-color wp-elements-6\">What is the Multilateral Investment Guarantee Agency (MIGA)?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">MIGA is the part of the World Bank Group that insures international investments against political risk. Eligible investors can take out cover for things like expropriation, restrictions on transferring currency out of a country, war and civil unrest, and a government breaching its contract with them. Most of MIGA&#8217;s work sits behind large infrastructure and development projects in markets where lenders would otherwise be reluctant to commit.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-central-palette-4-color has-text-color has-link-color wp-elements-7\">How does political risk insurance differ from international investment agreements?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">An international investment agreement is a treaty signed between governments. Political risk insurance is a commercial product you buy from an insurer.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A treaty grants investors a set of legal protections and usually a route to international arbitration if a host state breaches them. An insurance policy pays out when an event named in the policy happens. Investors often rely on both, since a treaty claim can take years to resolve while a policy is designed to cover the loss in the meantime.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-central-palette-4-color has-text-color has-link-color wp-elements-8\">How does political risk insurance help secure financing?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Political risk insurance can make a project more acceptable to lenders by reducing their exposure to specified political risks. This is particularly important for long-term projects where lenders need confidence that political events will not undermine the expected repayment of their financing. In this sense, PRI can improve access to financing, although it does not guarantee that a lender will approve a particular project.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-central-palette-4-color has-text-color has-link-color wp-elements-9\">What does a political risk insurance claim process look like?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A political risk insurance claim normally involves demonstrating that the insured event has occurred and that the policy conditions have been met. The process will depend on the insurer and the risk involved.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In practice, the key steps are:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Notify the insurer when a potential claim arises.<\/li>\n\n\n\n<li>Provide evidence that the insured event has occurred.<\/li>\n\n\n\n<li>Demonstrate compliance with the policy conditions.<\/li>\n\n\n\n<li>Follow any required dispute resolution or arbitration process.<\/li>\n\n\n\n<li>Allow the insurer to assess the loss before payment.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading has-central-palette-4-color has-text-color has-link-color wp-elements-10\">About JENOA<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/jenoa.com\/en\/\">JENOA<\/a> is an end-to-end digital broker specialising in reinsurance, risk management and specialist insurance solutions. Services and products are subject to change based on jurisdiction. With access to the Lloyd\u2019s and international reinsurance markets, JENOA works with businesses to develop risk solutions for complex exposures, including political violence and geopolitical risk.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Services and products are subject to change based on jurisdiction.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This article is for general information only and doesn&#8217;t constitute legal, financial or religious advice. To find out more about JENOA products and services per jurisdiction, please contact the <a href=\"https:\/\/jenoa.com\/en\/contact-us\/\">JENOA team<\/a> for more information.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>International investment always comes with some uncertainty, but political events can create a very different kind of risk. A government can restrict the movement of money, take control of an asset or become unable to honour its contractual commitments. Political risk insurance gives investors protection against certain losses caused by these events and can also [&hellip;]<\/p>\n","protected":false},"featured_media":2435,"template":"","class_list":["post-2434","news","type-news","status-publish","has-post-thumbnail","hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>\u00a0Political risk insurance: protecting international investments - JENOA\u00ae<\/title>\n<meta name=\"description\" content=\"Political risk insurance explained \u2014 how it protects international investments from expropriation, currency restrictions, and political violence.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/jenoa.com\/en\/industry-q-and-as\/political-risk-insurance-protecting-international-investments\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Political risk insurance: protecting international investments\" \/>\n<meta property=\"og:description\" content=\"International investment always comes with some uncertainty, but political events can create a very different kind of risk. 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