Political risk is a clear and present
danger to companies operating in today’s global
economy. It may come from political instability, military
conflict, terrorism, expropriation of assets or trade
frictions. To understand and mitigate against these
threats, International Risk offers political and business
risk assessments that are specifically tailored to the
requirements of corporate decision makers.
The Value of Political and Business Risk Assessments
Whether you are an investor, trader, insurer or business
executive seeking to enter into an unfamiliar country
or even if you already have a well-established presence,
understanding the ever-changing political and business
environments are critical to the success of your mission.
It is often the case that the actual political, economic,
business and social dynamics within a country or region
are significantly different from what appears on the
surface or in the media. An independent risk assessment
is vital in sorting out fact and insight from propaganda
and gossip.
Political and business risk assessments can save valuable
time and costs if conducted in the early stages of a
business evaluation as issues can be identified that
may need to be addressed before a company decides to
commit considerable resources to proceed with the transaction.
These assessments can also be used to decide if political
risk insurance coverage is required to mitigate against
potential risks, such as the non-honouring of sovereign
guarantees, the imposition of foreign currency controls
or the cancellation of operating licenses.
Our Approach
International Risk has access to an unrivalled range
of information sources, including a global network of
local associates, which allows us to provide assessments
that are rigorous, comprehensive, timely and reliable.
We work closely with clients to identify their requirements,
which can be classified into three broad categories:
- Macro-level issues: Political, economic, regulatory,
national security (including crime and terrorism),
diplomatic, legal, social, labour and other concerns
that could affect the overall operating environment.
- Specific business and transaction-related issues:
Risks related to the confiscation, expropriation or
nationalization of assets, trade-related disputes,
government interference, corruption, labour unrest
and other matters that have a direct impact on business
operations.
- Micro-level issues: Political, economic, social,
public order, environmental and other matters related
to the specific local areas or economic sectors in
which a client’s operations are or will be located.
We offer different types of products that depend on
the needs of our clients. They include detailed country
reports that can be updated regularly if required, as
well as specific industry or broader regional geo-strategic
analyses.
We can also conduct sophisticated scenario planning
exercises to assist clients in assessing potential future
trends and developments that might impact upon their
operations in the short, medium and long term.
Our Track Record
We have an extensive track record of advising leading
companies on the political and business risks they might
potentially encounter in their business dealings around
the world. They include insurance companies providing
political-risk-related coverage and firms in the oil
and energy sectors making substantial long-term investments
in volatile regions.
Here are some examples of the work that we have conducted:
- A foreign manufacturer considering an investment
opportunity in the Middle East: We conducted a political
and business risk assessment of the costs and benefits
of investing in a multi-million dollar manufacturing
facility in a Middle Eastern country. Issues that
were examined included the stability of the ruling
political elite, demographic dynamics, the threat
from militant religious groups, the reliability of
the military and the broader regional security environment.
- A European firm seeking to make an investment in
Africa: This firm was concerned by the potential expropriation
of its assets, labour and race issues, the state of
local law and order for its employees and the business
prospects for the development of a regional free-trade
accord that would expand market access for its goods.
- A multinational evaluating the need to take out
political risk insurance coverage: A multinational
that was investing several hundred million dollars
in a major infrastructure project in Asia required
an independent assessment of the need to undertake
political risk insurance coverage and what risks should
be considered.
Related Services
International Risk offers a number of other related
services that complement our political and business
risk assessments. They include:
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