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OECD countries now more vulnerable to credit and political risk?

OECD countries now more vulnerable to credit and political risk? | Insurance Business

OECD countries now more vulnerable to credit and political risk?

If BPL Global’s portfolio update is anything to go by, it looks like Organisation for Economic Co-operation and Development (OECD) countries now face greater credit and political risk.  

“Over the last 12 months, we have observed a marked increase of over 14% in the gross exposure across our portfolio, rising from US$41.1 billion in January 2018 to US$46.9 billion as at January 2019,” reported the specialist credit and political risk insurance (CPRI) broker.

“Of particular note is the increase in OECD exposure in our portfolio which accounts for half of this uplift, with nearly US$2 billion emanating from Northern and Western Europe.”

According to BPL Global, Spain and Germany ranked sixth and seventh, respectively, in the top 10 nations for CPRI claims by value for the three-year period from 2016. This after the broker, on behalf of its clients, collected US$32 million and US$27 million in claims arising from losses in the two countries.

Both Spain and Germany are not part of BPL Global’s table for all-time claims by value.

Meanwhile the 2016-2018 list was topped by Venezuela, followed by Brazil, India, Congo, and Azerbaijan. Below Germany were Gabon, Morocco, and Equatorial Guinea.    

“Analysing BPL Global’s enquiry flow over the last six months of 2018 shows that, in terms of risk location, there was an even distribution of enquiries between continents,” the new market report noted.

“Interestingly, OECD countries played host to a third of all risk enquiries. This evidences continuing demand growth for single-situation credit insurance beyond emerging markets.”