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Sep 2020

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Asia: Political risks have remained largely stable

Source: Asia Insurance Review | Jan 2020

Political risks in Asia have remained largely stable in the last quarter of 2019, with no country experiencing a change in the overall political rating, said Aon in its December 2019 Political Risk Newsletter.
 
However, several economies are in the spotlight, with ongoing protests in Hong Kong, slower economic growth in both India and China and several risk changes across Southeast Asia. Furthermore, localised terrorism, mass demonstrations, and human rights violations in some countries remain a threat to security and may mean higher insurance costs for businesses.
 
In Asia, economic growth concerns are at the forefront, as slowing global growth is hurting open economies. Additionally, event risks from the US-China trade war, Japan-South Korea economic tensions and potential oil price spikes further complicate the situation. 
 
Overall, Aon expects some resilience in Asia, even as export growth continues to face headwinds. Economic growth in China and Japan will slow further in 2020. Meanwhile, most other markets may register an improvement in growth due to low bases, accommodative policies and domestic support. Aon sees central banks in China, India, Indonesia, Thailand and the Philippines loosening monetary policy further. Risk aversion and any Chinese yuan weaknesses could hurt most Asian currencies.
 
Aon’s Political Risk Newsletter is developed in partnership with Continuum Economics, an economic research and country-risk firm. A 
 
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