included - Arthur J. Gallagher

Transcription

REPORT AND
MARKET UPDATE
CREDIT AND POLITICAL RISK INSURANCE (CPRI)
JULY 2014
ARTHUR J. GALLAGHER
AJGINTERNATIONAL.COM
LONDON CPRI MARKET UPDATE FOR JULY 2014
2
Founded by Arthur Gallagher in Chicago in 1927, Arthur
J. Gallagher & Co has grown to become one of the largest
insurance brokerage and risk management companies in
the world. With significant reach internationally, the group
employs over 17,000 people and its global network
provides services in more than 140 countries.
Outside the US, we use the brand name Arthur J. Gallagher.
3
ARTHUR J. GALLAGHER
CONTENTS
Review2
Commercial Market Overview
4
Total Available Market Capacity – July 2014
7
Total Capacity Available by Tenor – July 2014
8
Available Market Capacity Comparison
9
Trade Credit Insurance
10
Main Trade Credit Insurers
10
Emerging Markets Country Risk Ratings
11
Credit and Political Risks Division
14
Terrorism and Political Violence Insurance
15
Special Contingency Insurance
16
Contacts17
ARTHUR J. GALLAGHER
“IN AN AGE OF GLOBALISED INSECURITY,
OUR TERRITORIAL DEFENCE MUST BEGIN
BEYOND OUR BORDERS.”
ANDERS FOGH RASMUSSEN, NATO SECRETARY GENERAL
Arthur J. Gallagher (Specialty) Credit and Political Risk Insurance (CPRI)
Market Update for July 2014 summarises the changes in line structure and
tenors available from commercial CPRI insurers since our last report in January
2014. The summary reflects the outcome of reinsurance negotiations where
renewals have been completed in the intervening period, as well as the arrival of
any new insurers that have gained approval for their business plans and obtained
sufficient capital allocations. Additionally, any changes to credit agencies’ ratings
of insurers are detailed herein.
There has yet again been a large increase in capacity in the CPRI market this year, with increases
across all lines. This represents the 11th reported successive rise in market capacity, which has now
more than doubled since the advent of the Global Financial Crisis in 2008. There is, as always,
political unrest all over the world, some of which is highlighted below.
The militant Sunni extremist group, the Islamic State of Iraq and the Levant (ISIS), has expanded its
position in Iraq with the seizure of the Baiji oil refinery as well as swathes of the northwest of the
country. Nouri al-Maliki’s Shia led government retains control in the south, supported militarily by
Iran and Syria. It is unlikely that government will take back power in the north due to its
predominantly Sunni-led provinces, coupled with the seizure of the city of Kirkuk by Kurdistan’s
Peshmerga fighters. It is widely thought that there is a possibility of Iraq becoming three separate
states or descending into civil war.
In February, Ukraine saw its deadliest violence since independence from the Soviet Union in 1991,
subsequently leading to the ousting of President Yanukovych, the annexing of the Crimean
Peninsula by Russia and the declaration of independence in Donetsk and Luhansk. Tension between
Ukraine and Russia remains at the forefront of the political forecast in Eastern Europe, with the
complex task of the newly elected president, Petro Poroshenko, to balance the interests of the
nationalist anti-government protestors with the ethnic-Russian populations. Tension has been
further exacerbated due to the recent event of flight MH17 crashing over the rebel-held area on
17th July. The US and other nations say there is growing evidence of Russian complicity in the crash.
Provoked by the annexation of Crimea, Russia has been subjected to Western sanctions imposed on
individuals and companies deemed to be having direct involvement in destabilising the situation.
Riot police were deployed in São Paulo amid Brazil’s largest protest in 20 years, with strikes by airport
and underground workers. Brazil’s preparations for both the 2014 World Cup and the 2016
Olympics has led to a sharp economic slowdown – real GDP growth slowed in Q1 by +0.2%
compared with the previous +0.4% and growth for 2014 has been revised down to +1.6% with
inflation increased from 6.1% to 6.4%.
In Venezuela, expropriation risks should be lower in 2014 than in previous years but key sectors are
still likely targets. The energy sector risks will continue and evidence from economic policy decisions
shows that President Nicolás Maduro is following the policy template established by Hugo Chávez.
Argentina has been refused appeal, following the U.S. Supreme Court judgement, to reimburse
USD 1.33 billion to its creditors, leaving President Kirchner few legal options and chances of a repeat
2001 default causes concern. Presidential succession will be a crucial political dynamic through 2014
with violent crime being a key focus of political attention in 2014.
Egypt is still threatened by its systemic economic imbalances with political factions divided
between the need for military intervention and a citizen cabinet with both religious and partisan ties.
As Islamist political participation is closed off, terrorism is increasing. The IMF loan talks are still at
a standstill.
2
ARTHUR J. GALLAGHER
The BJP-led alliance’s strong mandate in the 2014 parliamentary election will improve India’s
government efficiency. Positive post-election sentiment and stable reform-oriented government will
drive gradual growth recovery. A poor monsoon season would create inflationary pressure, limiting the
monetary policy options. The first BJP budget due in July 2014 will be a key test of the new
government’s reformist drive.
Thailand’s military coup has increased the risk of violent protests. Peace talks with southern
insurgents are unlikely to reduce violence and the economy is bound for a sharp deceleration
in 2014.
Kenya has seen fractures in the ruling coalition increase political instability although the economy is
in ‘take-off ’ mode. Foreign direct investment is expected to take the lead in growth acceleration.
Syria’s prospects for a diplomatic solution to the war are weak. Interests of external forces are likely to
perpetuate Syria’s conflict and the civil war is revitalising jihadism’s regional appeal. Economic activity
will remain severely depressed as the conflict continues.
Libya’s political instability and insecurity is unlikely to significantly improve over the next year.
The government will probably be unable to curb the power of armed groups before 2015 and risks to
Libyan state stability rise as oil production falters.
China’s monetary tightening will limit economic growth in the near term. The Renminbi
should remain relatively stable over the long term, but short-term volatility will be more frequent.
Policy continuity is likely as China completes the transition from fourth to fifth generation
of leadership.
The Senkaku/Diaoyu Island issue with Japan highlights the more robust attitude China has been
taking to its territorial claims in both the East China Sea and the South China Sea. It poses worrying
questions about regional security as China’s military modernises.
Despite the above, the private market for credit and political risk insurance continues to be very
positive in its outlook, with an increasing sense of confidence across the market. Fitch Ratings has
upgraded Lloyd’s of London’s Insurer Financial Strength to ‘AA-’ from ‘A+’. Fitch has also upgraded
the Society of Lloyd’s Long-term Issuer Default Rating to ‘A+’ from ‘A’ and Lloyd’s Insurance
Company Ltd’s IFS rating to ‘AA-’ from ‘A+’. Trade credit and political risk insurers, who are for the
most part multi-line carriers backed by professional reinsurers, remain financially stable. There has
been a number of new entrants into the CPRI market in 2014, with total capacity increasing
significantly for CEN, CF and CR.
Other market changes are summarised below:
Ace
Standard and Poor’s have upgraded Ace Global
Markets’ financial strength rating to ‘AA’.
Antares
Antares Holdings Limited has been successfully
acquired by Qatar Insurance Company.
Aspen
Paul Sanders and Mimi Rumpeltin will be
joining Aspen from Zurich.
AWAC
AWAC’s financial strength has been downgraded
by A.M. Best and Standard and Poor’s to ‘A’.
Channel
Channel’s line size data is included in this edition
for the first time. Additionally, Michael Fan has
joined the team.
Beazley
Ed Cornish has moved from ANV and will now
be underwriting for Beazley Syndicates 623/2623.
ARTHUR J. GALLAGHER
Liberty Specialty Markets
Liberty has integrated their teams allowing an
increase in market capacity as highlighted in the
following tables. Andrew Beechey has also moved
from Zurich to lead the team in Asia.
Marketform
As well as increasing their maximum line size and
tenors, Marketform has access to Great American
International Insurance Ltd (GAIIL), their sister
company in Ireland, through which Marketform
can write business on company paper as well as
their existing Lloyd’s paper.
Swiss Re
Swiss Re’s line size data is included in this edition
for the first time, with CF and CEN being
underwritten by Rob Llewellyn and
Kaspar Zellweger.
Zurich
Zurich have reduced their maximum tenor for
CR to 5 years and reassessed their appetite for
the product line.
3
COMMERCIAL MARKET OVERVIEW
(Highlights indicate changes since last report)
Insurer:
Project Risks (CEN)
Trade Risks Political (CF)
Trade Risks Commercial
(CR)
‘Company Markets’
Rating(s)
Total max per
risk (USD)
Max
Tenor
(years)
Total max per
risk (USD)
Max
Tenor
(years)
Total max per
risk (USD)
Max
Tenor
(years)
ACE European
Group Ltd*
100,000,000
15
80,000,000
15
30,000,000
5
AA [S&P]
AIG
150,000,000
15
150,000,000
15
100,000,000
5
A+ [S&P]
Aspen*
100,000,000
15††
100,000,000
15††
100,000,000
8
A [S&P]
Atradius ***
96,000,000
7
96,000,000
7
96,000,000
7
A [A.M. Best]
Axis
50,000,000
7
50,000,000
7
35,000,000
7
A+ [S&P]
Catlin*
90,000,000
15
65,000,000
15
65,000,000
8
A [S&P]
CV Starr*†
50,000,000
10
50,000,000
10
10,000,000
5
A [A.M. Best]
Coface
70,000,000
10
70,000,000
7
70,000,000
7
AA- [Fitch]
Euler-Hermes
100,000,000
8
100,000,000
8
100,000,000
8
AA- [S&P]
FCIA
25,000,000
7
80,000,000
7
80,000,000
7
A+ [S&P]
Garant**
34,000,000
7
34,000,000
7
34,000,000
7
A- [Fitch]
Houston Casualty
40,000,000
7
40,000,000
7
50,000,000
5
AA [S&P/Fitch]
Ironshore
40,000,000
7
40,000,000
7
40,000,000
7
A (A.M. Best)
Lancashire Insurance
Ltd
200,000,000
10
75,000,000
10
0
0
A-[S&P]
LAU (AWAC)
8,000,000
5
20,000,000
5
20,000,000
5
A [A.M. Best]
Liberty Mutual
Insurance Europe
Ltd
50,000,000
15
50,000,000
10
50,000,000
7
A- [S&P]
Markel International
Insurance Company
0
0
50,000,000
5
120,000,000
7
A [S&P/Fitch]
Sovereign
80,000,000
15
80,000,000
15
0
0
AA [S&P]
Swiss Re Corporate
Solution Ltd
75,000,000
10
75,000,000
10
100,000,000
1
AA-[S&P]
XL
100,000,000
10
100,000,000
12
50,000,000
7
A+ [S&P/Fitch]
Zurich†††
150,000,000
15
150,000,000
15
75,000,000
5
AA- [S&P/Fitch]
Total:
‘Company Markets’
July 2014
1,608,000,000
+ 7.7%
1,515,000,000
+14.3%
1,185,000,000
+13.4%
Total: Jan 2014
1,493,000,000
1,360,000,000
1,080,000,000
Notes
* Can be written via either their company or Lloyd’s syndicate.
** Actual lines of EUR 25m, converted to USD for this report.
*** Actual lines of EUR 70m, converted to USD for this report.
† Insureds: non-financial institutions only for CR.
†† Follow multilateral insurers such as MIGA. Otherwise 10 years maximum.
††† No longer able to write non trade-related insurance.
4
ARTHUR J. GALLAGHER
continued
Insurer:
Project Risks
Trade Risks Political
‘Lloyd’s Markets’
(CEN)
(CF)
(CR)
[All Lloyd’s
Markets rated
A+ by S&P]
Total max per
risk (USD)
Max Tenor
(years)
Total max per
risk (USD)
Max Tenor
(years)
Total max per
risk (USD)
Max Tenor
(years)
ACE Global
Markets*
100,000,000
15
80,000,000
15
30,000,000
5
12,500,000
5
10,000,000
5
0
0
25,000,000
7
25,000,000
7
12,500,000
5
22,500,000
7
12,000,000
7
1,500,000
1
20,000,000
5
20,000,000
5
20,000,000
3
15,000,000
5.5
15,000,000
5.5
0
0
10,000,000
5
10,000,000
5
0
0
50,000,000
15††
50,000,000
15††
50,000,000
8
50,000,000
7
50,000,000
7
30,000,000
7
30,000,000
10
30,000,000
8
30,000,000
8
25,000,000
5.5
25,000,000
5.5
12,500,000
5.5
90,000,000
15
65,000,000
15
65,000,000
8
25,000,000
10
25,000,000
10
20,000,000
10
30,000,000
5
30,000,000
5
15,000,000
5
50,000,000
10
50,000,000
10
10,000,000
5
15,000,000
5
15,000,000
5
10,000,000
5
25,000,000
5
25,000,000
5
25,000,000
5
15,000,000
7
15,000,000
7
15,000,000
7
60,000,000
5
40,000,000
5
40,000,000
5
Lloyd’s Syn 2488
Amlin
Lloyd’s Syn 2001
Antares
Lloyd’s Syn 1274
ANV War &
Political Risks
Consortium
Lloyd’s Syn 1861
Argo
Lloyd’s Syn 1200
Ark
Lloyd’s Syn 4020
Ascot
Lloyd’s Syn 1414
Aspen*
Lloyd’s Syn 4711
Beazley
Lloyd’s Syn
623/2623
BRIT
Lloyd’s Syn 2987
Canopius
Lloyd’s Syn 4444
Catlin*
Lloyd’s Syn 2003
Channel
Lloyd’s Syn 2015
Chaucer
Lloyd’s Syn 1084
C V Starr
Lloyd’s Syn
1919*†
Hardy
Lloyd’s Syn 382
Hiscox
Lloyd’s Syn 33
ANV 5820
(Jubilee)
Lloyd’s Syn 5820
Kiln
Lloyd’s Syn 510
ARTHUR J. GALLAGHER
5
continued
Insurer:
Project Risks
Trade Risks Political
‘Lloyd’s Markets’
(CEN)
(CF)
(CR)
[All Lloyd’s
Markets rated
A+ by S&P]
Total max per
risk (USD)
Max Tenor
(years)
Total max per
risk (USD)
Max Tenor
(years)
Total max per
risk (USD)
Max Tenor
(years)
Liberty Syn
Management
Lloyd’s Syn 4472
50,000,000
15
50,000,000
10
50,000,000
7
Marketform
40,000,000
7
40,000,000
7
40,000,000
7
20,000,000
3
20,000,000
3
0
0
0
0
50,000,000
5
50,000,000
7
25,000,000
7
25,000,000
7
20,000,000
7
0
0
10,000,000
5
10,000,000
5
20,000,000
5
20,000,000
5
0
0
15,000,000
5
10,000,000
5
2,500,000
3
30,000,000
5
30,000,000
5
15,000,000
5
5,000,000
3
0
0
0
100,000,000
10
100,000,000
12
50,000,000
7
7,500,000
5
5,000,000
5
0
0
982,500,000
+7.7%
952,000,000
+12.7%
634,000,000
+16.6%
Lloyd’s Syn 2468
MAP
Lloyd’s Syn 2791
Markel
International*
Lloyd’s Syn 3000
Novae
Lloyd’s Syn 2007
Nexus CIFS
Lloyd’s Syn
4472/2007/1206/4444
O’Farrell
Lloyd’s Syn 1036
Pembroke
Lloyd’s Syn 4000
Talbot
Lloyd’s Syn 1183
Torus
Lloyd’s Syn 1301
XL*
Lloyd’s Syn 1209
WR Berkley
Lloyd’s Syn 1967
Total:
‘Lloyd’s Markets
July 2014’
Total:
912,500,000
845,000,000
544,000,000
January 2014
Notes:
* Can be written via either their company or Lloyd’s Syndicate.
† Insureds: Non-financial institutions only for CF and CR.
†† Follow multilateral insurers such as MIGA. Otherwise 10 years maximum.
6
ARTHUR J. GALLAGHER
TOTAL AVAILABLE MARKET CAPACITY – JULY 2014
(Total possible maximum USD per risk)
Project Risks (CEN)
Trade Risks Commercial (CR)
Company
1,608,000,000
1,515,000,000
1,185,000,000
Lloyd’s
982,500,000
952,000,000
634,000,000
Total*
2,215,500,000
Total: January
2014*
2,015,500,000
+9.9%
2,022,000,000
+7.3%
1,885,000,000
1,559,000,000
+13.1%
1,379,000,000
Notes:
*Totals do not ‘double count’ the Company and Lloyd’s lines of ACE, Aspen, Catlin, CV Starr, Liberty, Markel and XL that can be written via
either their Company or Lloyd’s syndicate.
TOTAL AVAILABLE MARKET CAPACITY – JULY 2014
Capacity
1,800,000,000
1,600,000,000
1,400,000,000
1,200,000,000
1,000,000,000
800,000,000
600,000,000
400,000,000
200,000,000
0
1,608
Company
Lloyd’s
1,515
1,185
983
952
364
Project Risks (CEN)
Trade Risks Commercial (Credit)
Risk Type
ARTHUR J. GALLAGHER
7
TOTAL CAPACITY AVAILABLE BY TENOR – JULY 2014
Max Tenor (years)
*
**
Project Risks (CEN)
Trade Risks Commercial (CR)
15
720,000,000
625,000,000
-
10
1,270,000,000
900,000,000
-
7*
1,862,500,000
1,554,500,000
1,025,000,000
5**
2,140,500,000
2,002,000,000
1,335,000,000
3
2,215,500,000
2,022,000,000
1,559,000,000
Catlin can write to 8 years for Trade Risks Commercial (CR). Euler-Hermes can write to 8 years for Trade Risks Political (CF) and Trade Risks Commercial (CR)
Ark’s USD 15m can be extended to 5.5 years for Project Risks (CEN) and Trade Risks Political (CF). Canopius’ USD 25m can be extended to 5.5 years for Project Risks (CEN) and Trade Risks Political (CF)
2,500,000,000
Capacity
2,000,000,000
2,215
Project Risks (CEN)
Trade Risks Commercial (Credit)
2,140
2,022
2,002
1,554
1,559
1,500,000,000
1,863
1,355
1,270
1,025
1,000,000,000
900
720
625
500,000,000
0
3
5
7
10
15
Tenor Available (Years)
8
ARTHUR J. GALLAGHER
AVAILABLE MARKET CAPACITY COMPARISON
(Total possible maximum MUSD per risk)
September 2001 to July 2014
Project
Risks (CEN)
Company
Sep
01
Jan
02
Jan
03
Jan
04
Jan
05
Jan
06
Jan
07
Jul
07
Jan
08
Jul
08
Jan
09
Jul
09
Jan
10
Jul
10
Jan
11
Jul
11
Jan
12
Jul
12
Jan
13
Jul
13
Jan
14
Jul
14
580
564
495
495
470
490
515
545
660
855
840
870
920
795
865
985
1015
1233
1285
1324
1493
1608
Lloyd's
574
274
278
280
318
335
368
388
423
453
478
560
593
593
633
643
622
743
762
7778
9123
9825
Total
1154
837
773
775
788
825
883
933
1083
1228
1238
1350
1348
1223
1293
1333
1382
1646
1688
1742
2016
2216
Sep
01
Jan
02
Jan
03
Jan
04
Jan
05
Jan
06
Jan
07
Jul
07
Jan
08
Jul
08
Jan
09
Jul
09
Jan
10
Jul
10
Jan
11
Jul
11
Jan
12
Jul
12
Jan
13
Jul
13
Jan
14
Jul
14
Trade Risks
Political (CF)
Company
268
331
318
318
310
405
440
480
530
735
720
750
800
745
865
948
1085
1195
1247
1291
1360
1515
Lloyd's
389
188
203
195
239
256
297
332
347
377
381
456
502
510
560
570
545
675
695
703
845
952
Total
657
519
520
513
549
661
737
812
877
1052
1041
1146
1157
1110
1240
1268
1420
1565
1607
1659
1885
2022
Trade Risks
Commercial
(CR)
Sep
01
Jan
02
Company
-
Lloyd's
Total
Jan
03
Jan
04
Jan
05
Jan
06
Jan
07
Jul
07
Jan
08
Jul
08
Jan
09
Jul
09
Jan
10
Jul
10
Jan
11
Jul
11
Jan
12
Jul
12
Jan
13
Jul
13
Jan
14
Jul
14
-
195
185
175
255
255
300
335
445
420
450
500
505
550
658
820
955
987
1036
1080
1185
-
-
73
87
79
103
167
190
208
238
251
307
346
341
353
658
338
453
455
457
544
634
-
-
268
242
254
358
422
490
543
653
641
727
731
731
768
865
998
1158
1177
1228
1379
1559
ARTHUR J. GALLAGHER
9
TRADE CREDIT INSURANCE – JULY 2014
As anticipated, Euler Hermes, Coface and Atradius have all delivered
improved profitability for the fourth consecutive year driven largely by
improved loss ratios. Since these three insurers cover up to 80% of insured
credit exposure globally, they act as a collective barometer of the state of the
market. Hence we expect most other insurers to deliver strong results in 2014.
Against this background, the leading three insurers continue to increase their risk exposures
during 2014 whilst adopting a cautious approach to risk hot-spots such as Eastern Europe
and the Middle East, where political uncertainty prevails. Some insurers are also warning of
rising insolvencies in certain trade sectors and geographic locations.
Insurers are currently focussed on top-line growth. What with capacity increasing and
demand levelling, this will inevitably cause downward pressure on the commercial price of
risk transfer and on policy structuring for portfolios that continue to perform strongly.
This is potentially good news for customers and new users of credit insurance. We have also
seen state backed insurers increasingly active in supporting their exporters; and the UK is
no exception, with UK Export Finance offering a range of new products and services to
the broker market.
Finally, leading credit insurer Coface completed its IPO of 51% of its capital in June 2014
with 49% remaining with Natixis Bank. This is a further sign of confidence in the credit
insurance markets by stakeholders.
MAIN TRADE CREDIT INSURERS
Insurer
Rating (S&P unless indicated)
Ground Up
Excess of
Loss
Single Risk
ACE
AA
-
x
x
AIG
A+
x
x
x
Atradius
A3 (A.M. Best)
x
x
x
CIFS*
A+
x
x
-
Coface
AA- (Fitch)
x
x
x
Credimundi
AA (as per ONDD)
x
x
-
Equinox Global*
A+ (as per Lloyd’s)
x
x
-
Euler Hermes
AA-
x
x
x
FCIA**
A+ (as per Great American Insurance)
x
x
x
HCC
AA
x
x
x
Ironshore
A (A.M. Best)
-
x
x
Latin American Underwriters***
A
-
x
x
Liberty Mutual
A-
-
-
x
Lloyd’s
A+
-
x
x
Markel
A (S&P/Fitch)
-
x
x
QBE
A+
x
x
x
XL
A+
-
x
x
Zurich
AA-
x
x
x
* As per Lloyd’s of London
** As per Great American Insurance
*** As per AWAC
10
ARTHUR J. GALLAGHER
EMERGING MARKETS COUNTRY RISK RATINGS
The following pages analyse the Country Risk Ratings, compiled by IHS
Global Insight, of various Emerging Markets. We compare the Overall Risk
Ratings and the Political Risk Ratings as at the time of publication of this
Market Report, and as at 1 January 2014. These countries have been selected
from the International Monetary Fund’s World Economic Outlook for
Emerging and Developing Economies, April 2010.
Political Risk Ratings analyse four factors:
Overall Risk Ratings take into account
six components:
• Institutional performance
• Political
• Representation of the population
• Economic
and organised interests
• Legal
• Internal political consensus
• Tax
• External political consensus
• Operational
• Security
These ratings are principally measuring stability.
Risk Rating
Risk Description
1.00 – 1.24
Insignificant
1.25 – 1.74
Negligible
1.75 – 1.99
Low
2.00 – 2.49
Moderate
2.50 – 2.99
Medium
3.00 – 3.49
Significant
3.50 – 3.99
High
4.00 – 4.49
Very High
4.50 – 5.00
Extreme
Sub-Sahara Africa
Overall Risk
at 01 Jan 2014
Overall Risk
at 01 Jul 2014
Political Risk
at 01 Jan 2014
Political Risk
at 01 Jul 2014
Burkina Faso
3.47
Significant
3.53
High
3.50
High
3.75
High
Côte d’Ivoire
3.87
High
3.87
High
4.00
Very High
4.00
Very High
Democratic
Republic
of Congo
4.38
Very High
4.33
Very High
4.25
Very High
4.25
Very High
Ghana
2.69
Medium
2.80
Medium
2.75
Medium
2.75
Medium
Kenya
3.38
Significant
3.29
Significant
3.50
High
3.50
High
Liberia
3.78
High
3.78
High
3.75
High
3.75
High
Nigeria
4.00
Very High
4.00
Very High
4.25
Very High
4.25
Very High
Sierra Leone
3.73
High
3.73
High
3.50
High
3.50
High
South Africa
2.54
Medium
2.75
Medium
2.50
Medium
2.50
Medium
Tanzania
3.32
Significant
3.32
Significant
3.00
Significant
3.00
Significant
ARTHUR J. GALLAGHER
11
Asia Pacific
Overall Risk
at 01 Jan 2014
Overall Risk
at 01 Jul 2014
Political Risk
at 01 Jan 2014
Political Risk
at 01 Jul 2014
Cambodia
3.19
Significant
3.19
Significant
3.00
Significant
3.00
Medium
China
2.87
Medium
2.88
Medium
2.75
Medium
2.50
Medium
India
2.86
Medium
2.86
Medium
3.00
Significant
3.00
Significant
Indonesia
2.75
Medium
2.79
Medium
2.50
Medium
2.50
Medium
Laos
3.06
Significant
3.06
Significant
3.00
Significant
3.00
Significant
Pakistan
4.05
Very High
3.89
Very High
4.50
Extreme
4.25
Extreme
Papua New
Guinea
3.32
Significant
3.39
Significant
3.50
High
3.75
High
Philippines
2.72
Medium
2.68
Medium
2.50
Medium
2.50
Medium
Thailand
2.74
Medium
2.91
Medium
3.00
High
3.50
High
Vietnam
3.01
Significant
2.95
Medium
3.25
Very High
3.25
Significant
Europe and CIS
12
Overall Risk
at 01 Jan 2014
Overall Risk
at 01 Jul 2014
Political Risk
at 01 Jan 2014
Political Risk
at 01 Jul 2014
Belarus
3.51
High
3.51
High
3.50
High
3.50
High
Czech
Republic
2.11
Moderate
2.04
Moderate
2.50
Medium
2.25
Moderate
Greece
2.96
Medium
2.96
Medium
3.00
Significant
3.00
Significant
Kazakhstan
2.97
Medium
3.10
Significant
2.75
Medium
2.75
Medium
Kyrgyzstan
3.53
High
3.53
High
3.75
High
3.75
High
Poland
1.96
Low
1.96
Low
2.00
Moderate
2.00
Moderate
Romania
2.59
Medium
2.53
Medium
2.50
Medium
2.25
Medium
Russia
2.98
Medium
3.07
Significant
3.00
Significant
3.00
Significant
Slovakia
1.88
Low
1.88
Low
2.00
Moderate
2.00
Moderate
Ukraine
3.59
High
3.26
Significant
3.50
High
4.00
Very High
ARTHUR J. GALLAGHER
Latin America and Caribbean
Overall Risk
at 01 Jan 2014
Overall Risk
at 01 Jul 2014
Political Risk
at 01 Jan 2014
Political Risk
at 01 Jul 2014
Argentina
3.43
Significant
3.44
Significant
3.25
Significant
3.25
Significant
Bolivia
3.45
Significant
3.45
Significant
3.50
High
3.50
Medium
Brazil
2.66
Medium
2.66
Medium
2.50
Medium
2.50
Medium
Colombia
2.83
Medium
2.83
Medium
2.75
Medium
2.75
Medium
Dominican
Republic
2.91
Medium
2.91
Medium
3.25
Significant
3.25
Significant
Ecuador
3.57
High
3.57
High
3.25
Significant
3.25
High
Guatemala
3.31
Significant
3.31
Significant
3.50
High
3.50
High
Nicaragua
3.42
Significant
3.42
Significant
3.50
High
3.50
High
Peru
2.95
Medium
2.95
Medium
3.25
Significant
3.25
Significant
Venezuela
3.68
High
3.92
High
4.00
Very High
4.00
Significant
Middle East and North Africa
Overall Risk
at 01 Jan 2014
Overall Risk
at 01 Jul 2014
Political Risk
at 01 Jan 2014
Political Risk
at 01 Jul 2014
Algeria
3.08
Significant
3.14
Significant
3.25
High
3.50
Significant
Bahrain
2.69
Medium
2.66
Medium
3.25
High
3.25
High
Egypt
3.61
High
3.57
High
4.00
High
3.75
High
Kuwait
2.65
Medium
2.62
Medium
3.25
Significant
3.25
Significant
Lebanon
3.40
Significant
3.30
Significant
4.00
Very High
3.75
High
Libya
4.06
Very High
4.09
Very High
4.25
Very High
4.25
Very High
Saudi Arabia
2.53
Medium
2.53
Medium
2.75
Medium
2.75
Medium
Tunisia
2.90
Medium
2.83
Medium
3.25
Significant
3.00
Significant
United Arab
Emirates
2.20
Moderate
2.20
Moderate
2.25
Moderate
2.25
Moderate
Yemen
4.10
Very High
4.10
Very High
4.25
Very High
4.25
Very High
ARTHUR J. GALLAGHER
13
ARTHUR J. GALLAGHER
CREDIT AND POLITICAL RISKS DIVISION
The Credit and Political Risks division comprises a well-established group
of highly experienced market practitioners with professional colleagues in
Singapore and Sydney as well as New York.
The combined resources offer the most comprehensive service that:
• provides access to specialist London and international insurers and reinsurers
• covers the full range of Political Risks, Trade Credit, Terrorism (including War
and Political Violence) and Surety markets
• is dedicated to structuring innovative insurance solutions that go beyond
transactional broking
• has the resources and relationships to negotiate the most competitive and
appropriate terms
• maintains the highest standards of documentation, management accounting
and claims collection
Arthur J. Gallagher’s product offering includes all aspects of:
• Comprehensive non-payment on private and government obligors
• Political Risk insurance for Lenders and Hedge Providers
• Confiscation / Expropriation of investments and assets
• Contract Frustration
– For sales and purchase contracts
• Trade Credit Insurance
– Single situation / whole turnover / excess of loss
• Currency Inconvertibility / non-transfer risks for investments, contracts and loans
• Terrorism, Politcal Violence and War risks for property and liability
• Special Contingency – Kidnap and Ransom. Protecting staff and individuals
• Surety Bonds
14
ARTHUR J. GALLAGHER
TERRORISM AND POLITICAL VIOLENCE INSURANCE
As the security of the world continues to be of concern we have seen a growth
in the number of insurers in this area.
The regions which appear to be the most vulnerable targets continue to be focussed on the
Middle East, in particular Syria and Iraq, and East Africa, where Kenya continues to be the
main country under threat. A terrorist attack against the coastal Kenyan town of Mpeketoni
on 15 June, led to at least 48 people being killed. Responsibility for this attack was claimed
by Harakat al-Shabaab al-Mujahideen, making it the largest attack by the Somali Islamist
militant group since the September 2013 Westgate Mall attack in the Kenyan capital Nairobi
that killed 67 people. This indicates a significant shift in the group’s targeting pattern, from
mostly military, government, and expatriate targets in high profile settings, to lower-profile
civilian targets.
The attack on Mpeketoni is likely to have been motivated firstly to cause further disruption
to an already volatile region, with the aim of firstly destabilising the Kenyan government’s
security efforts (especially during its Eurobond launch), and secondly to provoke sectarian
unrest. The latter objective is likely to have been inspired by militant groups in Nigeria and
Tanzania, which have increasingly attacked religious or civilian targets to exacerbate
sectarian hostility.
Within East Africa, Tanzania is at the highest risk – alongside Kenya – of further terrorist
attacks. On 13 June, an improvised explosive device (IED) was detonated outside a mosque
in Daranjani, Stone Town (Zanzibar), killing a leading cleric. Such attacks are intended to
provoke sectarian unrest in an already volatile region. It is likely that the attack on
Mpeketoni in Kenya had the same objective, as well as more generally seeking to destabilise
the government’s security efforts in the north-eastern region of the country. IHS assesses that
Zanzibar, Arusha, Dar es Salaam, Mbeya, Mwanza, Tanga and Mtwara are at highest risk of
further attacks.
The risk of terrorist attacks is lower in Uganda, due to significant improvements in the
security environment since the 2010 Kampala bombings during that year’s football
World Cup, and in Burundi, due to the country’s geographic distance from areas of
Al-Shabaab infiltration.
Meanwhile, the Republic of Djibouti has enjoyed relative security, largely due to the
presence of Western troops in the country. However, on 24 May, three people were killed
and at least 15 others wounded in an IED attack on a restaurant in the city of Djibouti, the
first suicide attack recorded in the country.
Having successfully renewed the policy for the Westgate Shopping Mall earlier this year, the
Terrorism team at Arthur J. Gallagher are continuing to place Political Violence policies in
East Africa.
ARTHUR J. GALLAGHER
15
SPECIAL CONTINGENCY INSURANCE
Mexico continued to be the top location for kidnap and ransom risk in 2013,
closely followed by India and Nigeria*.
Of the kidnaps that have occurred to foreign nationals, Nigeria is the top country, followed
by Lebanon and Syria.
Ransom demands vary between USD 6,000 and USD 9,300,000, with the average demand
being around USD 170,000.
In Africa the threat of kidnapping by Boko Haram continues. In May 2014, operatives
attacked a project site near Waza, in the extreme north of Cameroon and kidnapped
10 Chinese road workers, following a five hour gun battle. According to media reports,
1 soldier was killed and a Chinese national was injured in the attack.
This incident is likely to reflect Boko Haram’s continued high intent and capability to stage
abductions in the Extreme North region.
In May two aid workers who were kidnapped in North Western Syria in January 2014
were released.
A German student who had been kidnapped in Sanaa, Yemen in February 2014 was released
in May. The negotiation was reportedly led by the governor of al-Jawf, who allegedly
promised that the kidnappers’ relatives would be freed in exchange for the release of the
victim. It was unclear whether the kidnappers’ earlier demand of USD 5,000,000 was met in
part or in full. Subsequently, in April, a German diplomat was injured in an apparent kidnap
attempt close to the German Embassy in Sanaa.
The Philippines based Abu Sayyaf Group (ASG) appears to have increased its activity, on the
eastern coast of Malaysia and surrounding sea. In April a Chinese tourist and Filipina
employee from an east coast resort were abducted, followed in May by a Chinese manager of
a cage fish breeding company being abducted. In addition two Germans who were reported
missing from a yacht in the waters between Palawan and Sabah in April are suspected to be
in ASG captivity.
* Approximately 88% of abduction victims were locals as opposed to foreign nationals
16
ARTHUR J. GALLAGHER
CONTACTS
London
Mark Gubbins
Kit Brownlees
Managing Director
T +44 (0)20 3425 3194
E [email protected]
Managing Director
T +44 (0)20 7204 8586
E [email protected]
Political and Project Risks
David Maule
David Evans
Rupert Morgan
Matthew Solley
Executive Director
T +44 (0)20 7204 6157
E [email protected]
Executive Director
T +44 (0)20 7204 6156
E [email protected]
Executive Director
T +44 (0)20 3425 3199
E [email protected]
Executive Director
T +44 (0)20 7204 6175
E [email protected]
Rupert Murray
Shaun Purrington
Nicola Butterworth
Executive Director
T +44 (0)20 7204 8560
E [email protected]
Executive Director
T +44 (0)20 7204 8561
E [email protected]
Senior Broker
T +44 (0)20 7204 8564
E [email protected]
Credit and Surety
Terrorism and Political Violence
Pamela Fox
Sam Brentnall
Divisional Director
T +44 (0)20 3425 3192
E [email protected]
Broker
T +44 (0)20 7204 1886
E [email protected]
Singapore
Freddie Lim
Kirk Lee
Managing Director
T +65 6438 1771
E [email protected]
Divisional Director
T +65 6422 7444
E [email protected]
Sydney
David Pulver
Michael Woodward
Gary McNally
National Practice Leader
T +61 2 9242 2034
E [email protected]
Divisional Manager
T +61 2 9242 2003
E [email protected]
Authorised Representative
T +61 416 027 903
E [email protected]
New York
Gabe Mansky
Don Harkey
Area Executive Vice President
T +001 212 994 7068
E [email protected]
Senior Vice President
T +001 212 994 7027
E [email protected]
ARTHUR J. GALLAGHER
17
Arthur J.Gallagher
Walbrook Office
The Walbrook Building
25 Walbrook
London
EC4N 8AW
Tel: Fax:
+44 (0) 20 7204 6000
+44 (0) 20 7204 6001
www.ajginternational.com
Arthur J. Gallagher (Specialty) is a trading name of Arthur J. Gallagher (UK) Limited which is authorised
and regulated by the Financial Conduct Authority. Registered Office: The Walbrook Building, 25 Walbrook,
London EC4N 8AW. Registered in England and Wales. Company Number: 1193013. www.ajginternational.com
The information contained in this CPRI Report and Market Update has been compiled by Arthur J. Gallagher
(Specialty) from information provided by each insurer. The figures expressed reflect the theoretical maximum
possible lines available which are dependent upon many underwriting factors including the nature of the
risk, the country of risk and available country capacity at the time which may reduce the amount of capacity
actually available and is subject to change without notice.
CPRI Report and Market Update does not purport to be comprehensive or to give legal advice. While every
effort has been made to ensure accuracy, Arthur J. Gallagher (Specialty) cannot be held liable for any errors,
omissions or inaccuracies contained within the document. Readers should not act upon (or refrain from acting
upon) information in this document without first taking further specialist or professional advice.
1
ARTHUR J. GALLAGHER

included - Arthur J. Gallagher

Transcription

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