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Areas affected by Arab Spring hot spots on Aon's 2012 Political Risk Map

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Areas affected by Arab Spring hot spots on Aon's 2012 Political Risk Map

Tensions resulting from the pro-democracy uprisings in the Middle East and North Africa throughout 2011 and into 2012 remain a concern for businesses operating in those nations, according to an analysis released today by Aon Risk Solutions.

Aon's 2012 Political Risk Map measures political risk in 167 countries and territories based on levels of exposures such as currency exchange transfer, sovereign nonpayment, political interference, supply chain disruption, legal and regulatory risk, and political violence.

The uprisings in the Middle East and North Africa, referred to as the Arab Spring, also have increased the interest for political risk insurance among chief stakeholders of organizations, the Chicago-based insurance brokerage said in a statement accompanying the report.

“These uprisings and protests remain a key concern in 2012 and we see this reflected in rating downgrades of several countries,” said Roger Schwartz, senior vp of political risk for Aon Risk Solutions' crisis management practice, in the statement. “This is forcing CEOs and CFOs of businesses with overseas operations in emerging markets to revisit risk management and risk mitigation measures.”

The annual map ranks political risk on a six-point scale from low risk to very high risk. Country ratings reflect a composite analysis by Aon Risk Solutions, Oxford, England-based global analysis and advisory firm Oxford Analytica, and 26 Lloyd's of London syndicates and corporate insurers that write political risk insurance, Aon said.

In the 2012 map, political risk has increased in 21 countries and declined in three.

Aon noted that the outcome of elections this year in the United States and Europe, and the Eurozone debt crisis, add to greater global uncertainty and significant risk.

Financial or reputational loss as a result of legal and regulatory difficulties within a host country was the most common risk on the map with 104 countries, including Belarus, Kazakhstan, Somalia, Thailand and Yemen.

Supply chain disruption as a result of political, social, economic or environmental instability was the least common risk on the map with 61 countries, including Guinea Conakry, Papua New Guinea, Syria, Tuvalu, and Vanuatu.

The 2012 Political Risk Map is available at www.aon.com.

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