Political Risk and Structured Credit

Global Expertise

Tailored Political Risk Insurance and Structured Credit Solutions

HWI provides tailored political risk insurance and structured credit solutions. Our team brings over three decades of global insurance experience in the private, public, and multilateral markets, and can develop customised solutions that give you a competitive advantage.

We will work with you to evaluate your clients’ global political and credit risks and risks associated with trade and investments. This cooperation gives us a comprehensive understanding of their unique risk profile, allowing us to create bespoke insurance solutions that provide you with the coverage you need.

Our solutions can support growth, protect cash flow, provide capital relief, reduce financing risk and cost of funds, mitigate supply chain risk and keep balance sheets safe from other complex risks.

We have the experience and skill to identify the right insurer or lead underwriter for your business, combined with the ability to actively assist in making transactions happen promptly and efficiently.

Our team has substantial experience in dealing across a broad range of sectors over many years, and we can provide global insurance programmes with localised service through our international network of strategically placed offices.

contact

Key Contacts

Benefits

What are the benefits of Political Risk & Structured Credit Insurance?

In the current geopolitical environment, political risk and structured credit insurance, are increasingly important in affording Insureds global protection for their assets, wherever these may be situated, whether they are fixed or mobile assets, equity investments, debt, trade receivables or other obligations.

Coverage gives our Insureds balance sheet protection. Whether protecting against sudden and unexpected changes in geo-politics or providing back up security to meet obligations under the terms of a credit facility, HWI can provide the security that allows your business or investment to grow and perform securely.

applications

What are typical applications of Political Risk Insurance?

Protecting Investors equity in fixed assets against Expropriation, Nationalisation, Confiscation, Seizure, Forced Divestment, Forced Abandonment, Import/Export Embargo / Licence Cancellation, Non-Honouring of an Arbitration Award by a Sovereign, Political Violence, Inability to transfer dividend due to Exchange Transfer Embargo/ Currency Inconvertibility.

Providing project finance where the finance is secured against the against the underlying asset, against default due to political risk including Expropriation, Nationalisation, Confiscation, Seizure, Forced Divestment, Forced Abandonment, Import/Export Embargo / Licence Cancellation, Non-Honouring of an Arbitration Award by a Sovereign, Political Violence, Inability to transfer loan repayments due to Exchange Transfer Embargo/ Currency Inconvertibility.

Protecting Mobile Plant, Machinery, Stocks etc. against Expropriation, Nationalisation, Confiscation, Seizure, Import/Export Embargo, Forced Abandonment and Political Violence.

Contract Frustration – Protecting Exporters’ Pre-shipment/Tooling Up/Mobilisation Costs in the event of a contract being frustrated due to political risk including Government Law, Order or Decree, Licence Cancellation, Import/Export Embargo, Sanctions, War, Unilateral Termination by a government or parastatal buyer.

Contract Frustration – Protecting exporters against Non-Payment by a parastatal, sub-sovereign, or sovereign entity, including Non Honouring of a Guarantee or other instruments.

Contract Frustration – Protecting buyers against, Non Delivery against pre-payments or under a tolling or processing agreement as a consequence of Government Law, Order or Decree, Licence Cancellation, Import/Export Embargo, Sanctions, War and Unilateral Termination if the contracting party is a government or parastatal entity.

Fair/Unfair Calling of Guarantees/Sureties/Bonds in circumstances where a contractor cannot continue with a contract owing to political risk, including Government Law, Order or Decree, Licence Cancellation, Import/Export Embargo, Sanctions, War. Coverage can also include Unfair Calling if the counterparty is Sovereign/Sub-Sovereign or Parastatal.

Non Payment or Non Honouring of Guarantees by Sovereign/Sub-Sovereign/Parastatal entities. This coverage bought both by financiers and contractors.

Reinsuring and/or co-insuring with export credit agencies and multilateral agencies.

market

Capacity / Limits

The market comprises of over 50 private underwriters, export credit agencies and multilateral agencies. Cooperation between the private and public markets has accelerated over the past decade, with multiple coinsurance, excess and reinsurance placements being made.

One of the largest placements made, covering political risk on an equity investment made by a fund investing in critical infrastructure was for EUR 1 billion. For trade transactions the smallest transactions need to generate a premium income of +/-EUR 100,000 to obtain market interest.

The market sweet spot for trade transactions is an exposure of between EUR 10 million and EUR 250 million.
For political risk coverage on fixed investments, it is an exposure of between EUR 10 million and EUR 500 million per territory. Capacity can become constrained by territory, sector and/or obligor. In such circumstances our strong, long-term relationships with key underwriters can unlock capacity.

HWI has terms of business agreements/relationships with all major political risk and structured credit insurers.

For more information about our capabilities