Political Risk Insurance – A Primer for Foreign Investors

6 Pages Posted: 22 Apr 2018

See all articles by Alan Franklin

Alan Franklin

Global Business Risk Management

Date Written: April 21, 2018


Most international Investors do not have familiarity with political risk insurance. The basic reason is that they do not understand the risks inherent in international investment, and therefore do not realize how these risks can be insured against by PRI. Thus, the article sets out 10 categories of risks that are faced by international investors. It then explains in brief how PRI can be used to transfer the risks to insurers. PRI can also be used to mitigate risks as insurers, through their “advocacy” powers and political strength can often persuade the host state government to change their conduct. The article then outlines the basic categories of political risk insurers and discusses briefly the advocacy powers of each.

Keywords: Political Risk Insurance, International Investment Agreements, Export Credit Agencies, Multilateral Financial Institutions

JEL Classification: K2, K20, K33, K4, M1, M16, M48, F02, F2, F23

Suggested Citation

Franklin, Alan, Political Risk Insurance – A Primer for Foreign Investors (April 21, 2018). Available at SSRN: https://ssrn.com/abstract=3166703 or http://dx.doi.org/10.2139/ssrn.3166703

Alan Franklin (Contact Author)

Global Business Risk Management ( email )

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