Businesses urged to act early on political risk coverage
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Act early and arm yourself with data and analytics when approaching the C-suite about political risk insurance, a pair of experts advise.
“Unless I have solid analytics, I’m just another employee with an opinion,” said Debbie Gramer, Englewood, Colorado-based director, global risk management and travel Arrow Electronics Inc., a multinational distributor of technology products, including semiconductors.
She was speaking during a session on political unrest Tuesday at Riskworld, the Risk & Insurance Management Society Inc.’s annual conference in San Francisco.
Ms. Gramer also recommended taking action before a crisis hits the front pages. “Do thoughtfully consider it now,” she said, while it is still possible to get policies “in most countries.”
Russia, Ukraine and Belarus have closed to new coverage inquiries, according to Laura Burns, senior vice president, political risk-Americas, at Willis Towers Watson PLC.
She said that although the political risk market is well-capitalized it’s important to consider “where is our footprint in the world and might we want to look at this sooner than later.”
Scenario analysis — looking beyond purely quantitative data such as sales and inventories and posing specific situational exposure — is one of the newer tools gaining favor among brokers and policyholders. “One thing we’re seeing skyrocket is scenario analysis,” Ms. Burns said.
Ms. Gramer said newer analytical tools provide “so much more information than we ever thought about” and proved especially useful in Arrow’s recent review of political risk cover.
