Willis helps launch political risk model for foreign investments

A risk model launched Wednesday by Willis Group Holdings P.L.C. and consulting firm Oxford Analytica enables companies to assess and compare the financial implications of exposure to six different political risk perils across 11 industry types in 100 countries, according to a joint statement from the companies.

The value at political risk model is known as VAPOR, said the statement by Willis and Oxford, England-based Oxford Analytica.

For example, VAPOR determines North Korea is the investment destination that currently carries the highest political risk, with investors estimated to lose about $40 of every $100 invested over a 10-year period compared with a $1 loss on every $100 invested over 10 years in the United States or United Kingdom, according to the statement.

“Inspired by the catastrophe modeling industry, VAPOR takes a probabilistic approach that assesses whether a particular society is more or less vulnerable to experiencing a suite of discrete political contingencies over time — and then estimates the possible cost, over time, of these contingencies to business,” Sam Wilkin, senior adviser for political risk at Oxford Analytica, said in the statement.