
Geopolitics in Insurance - Thematic Intelligence
Description
Geopolitics in Insurance - Thematic Intelligence
Summary
As the geopolitical landscape becomes increasingly fraught, the insurance industry must be aware of the growing political risk across the world. The modern company has connections to a multitude of countries and is therefore subject to risk in each of those nations. These risks include expropriation and discrimination, political violence, forced abandonment, import and export restrictions, currency conversion or transfer restrictions, and kidnapping or ransom. The current global economic climate, social media as a tool to mobilize or drive activism, and increasing distrust in governing bodies and institutions are all fueling this growing political risk. Global supply chain problems and a pattern of deglobalization have affected global trade and are increasing marine, aviation, and transit risks. Meanwhile, the irrepressible rise of extreme weather events is driving significant economic and insured losses.
The occurrence of civil unrest is growing across the world as consumer finances are continually squeezed due to the global cost-of-living crisis. Political risk and political violence are becoming prevalent threats to businesses across the world and therefore are becoming key risks to insurers. Military tensions are growing around Taiwan (a province of China) and the South China Sea. Businesses operating in or around China could be subject to similar measures as those in Russia following its invasion of Ukraine, leading to various knock-on effects for trade-related insurance policies. The cyber risks posed by military activity are also a major systemic risk to the industry. As companies engage in reshoring or friendshoring away from China, supply chains will be affected by the changes. Costs will almost certainly go up as operations are moved away from low-cost labor locations, thus increasing claims costs for the industry. Meanwhile, geopolitical tensions around major shipping passages will likely put increased pressure on marine, aviation, and transit lines.
Scope
- Russia’s invasion of Ukraine will be highly costly to insurers. Estimates suggest losses could be as high as $20 billion for the industry.
- The past few years have seen considerable damage caused by political violence. For example, Allianz Global Corporate and Specialty cites $1.3 billion in losses caused by damage to infrastructure and lost output in Peru during protests in 2022.
- The effects and costs of climate change are tangible. Swiss Re estimates that 2022 saw $115 billion in insured losses globally.
- Understand the relationships between the world’s current major and upcoming geopolitical powers.
- Determine how political risk and political violence are increasing across the world and how insurers can mitigate against them, providing vital cover for international businesses.
- See how economic, social, and political factors are coalescing into a difficult period across the world.
- Formulate strategies for overcoming these challenges in areas across the insurance value chain.
Table of Contents
64 Pages
- Executive Summary
- Players
- Thematic Briefing
- Geopolitical background, defining political risk, and scope of this report
- The GlobalData Country Risk Index highlights the political risk in Africa and Asia
- The US is still the leading geopolitical player, but its hegemony is declining
- China is the major perceived threat to the US
- Europe is somewhat divided over China but remains resolute against Russia
- Russia’s invasion of Ukraine has alienated it from the West
- India is positioned as a neutral player in the geopolitical environment
- The Middle East is looking to exert influence through investment and mediation
- Trends
- Technology trends
- Macroeconomic trends
- Regulatory trends
- Industry Analysis
- Geopolitics challenges in insurance
- Terrorism and sabotage remain global risks but the epicenter is now Central Africa
- Cases of political violence have been steadily growing for a few years
- Political risk is growing as geopolitical tensions mount
- Marine, aviation, and transit risks are growing with trade friction and military action
- Natural catastrophes and climate change are highly costly to global insurers
- Timeline
- Signals
- Company filing trends
- Social media trends
- Value Chain
- Product development
- Marketing and distribution
- Underwriting and risk profiling
- Claims management
- Customer service
- Companies
- Sector Scorecards
- Non-life insurance sector scorecard
- Who’s who
- Thematic screen
- Valuation screen
- Risk screen
- Glossary
- Further Reading
- GlobalData reports
- Our Thematic Research Methodology
- About GlobalData
- Contact Us
- List of Tables
- Table 1: Technology trends
- Table 2: Macroeconomic trends
- Table 3: Regulatory trends
- Table 4: Political risk is growing as geopolitical tensions mount
- Table 5: Companies
- Table 6: Glossary
- Table 7: GlobalData reports
- List of Figures
- Figure 1: Who are the leading players in the geopolitics in insurance theme and where do they sit in the value chain?
- Figure 2: GCRI – Global political risk heat map
- Figure 3: The real GDP of China and the US far exceeds the rest of the leading global economies
- Figure 4: PRI incorporates a wealth of threats to businesses including terrorism, PV, and other political risks
- Figure 5: Credendo country risk assessment: political violence risk
- Figure 6: Ukraine’s property insurance market has been declining since 2019 but the invasion will cause further losses
- Figure 7: Credendo country risk assessment: currency inconvertibility risk
- Figure 8: The global MAT market looks set for strong growth over the next five years
- Figure 9: The main maritime shipping routes and chokepoints
- Figure 10: The US is by far the largest market for fire and natural hazard insurance
- Figure 11: The geopolitics in insurance story
- Figure 12: Mentions of geopolitics in insurance company filings peaked in 2021
- Figure 13: Net sentiment in geopolitics in insurance has declined quite sharply since the start of 2021
- Figure 14: The insurance value chain
- Figure 15: Who does what in the non-life insurance space?
- Figure 16: Thematic screen
- Figure 17: Valuation screen
- Figure 18: Risk screen
- Figure 19: Our five-step approach for generating a sector scorecard
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