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Chasing the Wind

Cara Santos Pianesi's picture

MIGA recently sponsored its seventh symposium on political risk issues, in tandem with Georgetown University’s School of Foreign Service. We happily note that the symposium has established itself as the world's leading forum for cutting-edge assessments of the international political risk management industry, and this year it did not disappoint. A summary of the event is here. 

I’ll concentrate on one trend that was noted clearly from the political risk insurance (PRI) providers, like MIGA, that were in attendance. All agreed that, since the international financial crisis, new business has mostly taken the form of obligor default products. For the PRI industry, an obligor is a country; this product is used when there is some sort of an agreement by which a government has financial payment obligations or guarantees with an investor.  The product is suitable for certain types of transactions, for example public-private partnerships or power purchase agreements.