In today’s increasingly integrated world, political risks are key determinants of the business landscape. We need to be aware of any relevant political developments, actions and decisions that may affect our business. Within our risk management organisation, we have a team of specialists who look at a wide range of political risks at global, country and business transaction levels.
These specialists identify, assess and monitor political risks on an ongoing basis, so the Group understands their implications and can initiate appropriate mitigation measures if required. Covering both developed and high growth markets, they pay attention to domestic risks such as political instability, terrorism or social unrest as well as cross-border issues, for example international trade, energy and armed conflicts.
Our understanding of political risks is also highly relevant to ensuring sustainable business operations in line with ESG principles. Several of the sectors and issues covered by the umbrella guidelines and policies of our Sustainability Risk Framework (see Our Sustainability Risk Framework) have a significant political dimension. Implementing these policies, both through SBR assessments and exclusion policies, thus requires a solid grasp of political risks. This is particularly true with regard to human rights violations, the proliferation of armaments in conflict areas and the identification of areas prone to civil unrest.
Furthermore, we seek to raise awareness of political risk within the re/insurance industry and among the broader public, and engage in dialogue with our clients and other stakeholders. We also distil our ongoing assessments of political risks into country ratings which support our risk control frameworks.