Political risks can increase when companies expand overseas, and multinational companies must continually assess their exposures, according to panelists at a session Tuesday at the Risk & Insurance Management Society Inc. conference in New Orleans.

Political risk is now an issue that is very much on the agenda of the senior management of multinational companies, said David H. Anderson, senior vice president and director of global business development for credit and political risk at Zurich Insurance Group Ltd. in Washington.

“This is an insurance coverage that gets a lot attention from our senior management and the C-suite,” said Judith M. McInerny, director of risk management and treasury at Corning, New York-based materials science company Corning Inc.

Ms. McInerny shared her experiences of evaluating political risk exposures with attendees at the RIMS hot topic session on growing a business in a tough geopolitical environment.

She said her company, which has more than 30,000 employees worldwide and total assets of about $30 billion, has significant research and development, manufacturing and supply chain operations in emerging markets, and that its operations in Asia are now its biggest in terms of assets.

Corning has operations in South Korea close to the border with North Korea and so must be mindful of that threat, Ms. McInerny said. In addition, she said, Corning has operations in Mexico that could be affected by drug cartel activity.

The company has purchased political risk coverage since the 1960s, she said. At that time the whole program was underwritten at Lloyd’s of London, but over time the values at risk grew to exceed the available insurance capacity, Ms. McInerny said.

She said that in her experience, buying confiscation, expropriation and nationalization coverage in addition to political violence coverage had tended to mean rates were reduced for that political violence cover, as it was bundled with the rest.

Over recent years, in general rates have fallen for political risk coverage, the terms and conditions have become more favorable for buyers because of increased capacity, and the “coverage has improved,” she said.

But the number of exposed countries, and the size of the assets Corning has in those countries, has increased greatly.

“So our approach is to continuously examine what our exposures are,” she said.

Ms. McInerny said she uses insurer and broker tools, surveys and information about how other companies are mitigating their risks to get a handle on where Corning’s exposures are.

She also said that she is involved in due diligence processes when her company is seeking to expand.

Zurich’s Mr. Anderson said that while the period 2010-2014 saw a dramatic decrease in the number of trade credit claims – which had spiked after the global financial crisis that began in 2008 – the number of notifications of political risk events such as the Arab Spring uprising in the Middle East, and violence in Eastern Ukraine, among others, had increased significantly.

He said that one option for companies with operations in hard-to-insure countries was to use a captive insurer to take on that risk and then reinsure it.

Putting political risk into a captive can give diversification because it is uncorrelated with other property and casualty risks, he added.