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Unlocking the power of Political Risk Insurance

S&P Global’s independent study, commissioned by Marsh, shows political risk insurance curbs country risk premium, improves valuation of investments in emerging markets, and enhances a project’s internal rate of return.
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12/03/2024

S&P Global’s independent study, commissioned by Marsh, shows political risk insurance curbs country risk premium, improves valuation of investments in emerging markets, and enhances a project’s internal rate of return.

Are you considering expanding your business into high-growth and/or high-risk territories? Or perhaps you are already operating in these markets? In either case, understanding the quantifiable benefits of political risk insurance (PRI) is crucial to your investment decision-making process.

Key benefits noted in our report findings include:

Mitigates cash flow losses

PRI compensates for potential losses associated with ownership and operating rights, asset damage, dividend repatriation blocks, and state contract breaches. It safeguards your investments and protects your bottom line.

Lowers hurdle rate of return

S&P’s CRIM framework adequately compensates for country risk by incorporating a country risk premium into your discount rate. Our report shows how PRI justifies a reduction in that premium, enhancing your returns.

Quantifies risk reduction

S&P Global's model quantifies expected cash flow losses from all country risk sources, including those covered by PRI. This can lead to measures that improve the credit and country risk profile of your projects.

Enhances internal rate of return

Contrary to conventional wisdom, our analysis reveals that PRI actually enhances the internal rate of return of insured projects, which means that you can experience higher valuations, favorable investment finance terms, and other benefits.

Don't let political risk hinder your growth and profitability — unlock the full potential of PRI.

To read the full report, including the study methodology, please click below:

Download Report

About S&P Global

S&P Global (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions.S&P Global has more than 50,000 key business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, S&P Global is committed to sustainable, profitable growth.

The S&P Global economics and country risk team takes an intelligence-led approach to forecasting the full spectrum of commercially relevant political, economic, legal, tax, operational, and security risks, in 211 countries. They provide risk solutions that are data-driven, leverage data science and geospatial analytic tools, and are informed by the largest team of country, banking, and sector risk analysts in the market. The country risk team has more than 110 dedicated analysts and data scientists.

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Please note that Marsh PB Co., Ltd and Marsh McLennan are not engaged by nor involved in any manner with Bonus Ranch and its promotion, and has not placed any insurance for nor insured any of its businesses or operations. Marsh as a licensed insurance broker will not request customers to make payment via non-standard methods, such as the transfer of money to any individual’s bank account.