Political risk set to remain elevated but threat levels overestimated
Source: Asia Insurance Review | May 2023
Political risk is likely to remain elevated for multinationals throughout 2023 as several major factors combine to compound problems for risk managers according to Marsh 2023 Political Risk Report.
The report, however, says that brokers believe that the perceived level of risk is higher than the actual threat faced by companies, and there are reasons for optimism and opportunities for growth at nimble firms.
Marsh 2023 Political Risk Report outlines major shifts and trends in the global political and economic landscape that will impact multinationals and investors in the coming year.
It identifies four areas where growing risk threatens global trading security and investment environments. These risks are persistent political instability, economic retrenchment, competition for strategic resources and supply chain diversification.
Meanwhile, competition for strategic resources is intensifying as a result of Russia president Vladimir Putin’s invasion of Ukraine and the ever-increasing demand for raw materials used in modern technologies, the report said.
The authors of the report say countries that hold these resources are seeing opportunities for growth, and so competition between governments in many places is contributing to geopolitical instability. A