Intensifying geopolitical rivalries, policy uncertainty and competition for critical minerals are reshaping the risk landscape as well as driving demand for protection and these in turn are giving a boost to credit and political risk insurance according to a new report.
Global insurance broking firm Howden Group recently released its 43-page "2025 Credit and Political Risk Insurance" report, 'Opportunity in flux', which reveals that new demand for political risk insurance is up by a third due to considerable uncertainty around the geopolitical and macroeconomic environment.
Amid the softening of the broader insurance cycle, the report argues that now is the time to draw in additional new entrants and for existing credit and political risk insurance (CPRI) insurers to accelerate ventures into new asset classes and territories.
With an aggregated premium base of $50bn the CPRI and surety market surpasses the size of many other specialty insurance markets, including marine and energy.
The series of economic and geopolitical shocks in recent years has done little to hold back the CPRI market’s performance: it consistently delivers healthy net combined ratios, with trade credit in the range of 70-80%, which sits at the top end of the broader CPRI market. These results rival the best underwriting in the market, and it is therefore equipped with the skills and expertise for sustainable expansion.
While the market has performed strongly, premium growth has not developed at the pace of other business lines, including property and cyber. There is room for a greater growth rate in today’s world; CPRI presents a compelling case from both a buyer and capacity provider perspective in supporting businesses to invest and trade through heightened volatility whilst delivering market-leading underwriting results.
Howden CAP deputy CEO and head of CPRI Matthew Strong said, “The CPRI market’s outstanding long-term performance is testament to the deep sector expertise that pervades the value chain.
“With demand for CPRI protection rising, now is the time for the market to step up even further. This will enhance global economic growth by increasing commitments and innovating, as well as providing businesses, lenders and public sector entities around the globe with the certainty they need to trade and invest with confidence.”
Howden Re MD global specialty treaty Phil Bonner said, “Yes, risk is up in a highly fractured world, but providing protection to help clients trade and invest through such uncertainty is precisely why CPRI exists.
“As demand for protection rises in response to global instability, our call to action for the market is to not only provide adequate supply but to also offer underwriting flexibility and imagination that keep up with clients’ changing needs.”