Within the Political and Credit Risk team, we have extensive experience in the insurance, banking and ratings agency sectors, providing our clients with expert and comprehensive advisory and coverage across the Political and Credit Risk spectrum, with top-tier line size and tenor capabilities.
The team uses multiple information service providers to align our knowledge base with our clients. This applies across various areas, from shadow rating methodology, to aircraft and shipping asset valuations, and political risk consultants with capabilities on the ground across the globe.
Political and Credit Risk’s worldwide client base includes Corporates, Export Credit Agencies, Financial Institutions, Multilateral Institutions and Traders.
Types of cover
The Non-Payment Insurance (NPI) product typically covers the insured against non-payment for any reason, usually arising from default, insolvency or bankruptcy. Lloyd’s underwriters code non-payment insurance products as contract frustration, financial guarantee or trade credit, as per Lloyd’s bulletin Y5191.
NPI is provided on the basis of a partnership between insurers and clients, with fair presentation of the risk to be insured, as required by insurance law, and supplemented by insurers’ independent underwriting analysis.
The policies generally include a “waiting period.” Waiting periods are of negotiable length, typically 90-180 days.
Similar principles to those in Trade Credit apply, however Contract Frustration is applicable where the counterparty risk insured is a government entity or a commercial entity controlled and/or majority-owned by a government entity, i.e. Ministry of Finance or state-owned utility provider.
Political and Credit Risks can include and expand the coverage provided by the Terrorism and Political Violence team to losses arising from:
- Capture and Seizure
- Confiscation, Nationalisation and Expropriation
- Selective Discrimination
- License Cancellation
- Forced Divestiture
- Arbitration Award Default
- Currency inconvertibility and Exchange Transfer
Henry Mumme-Young is the Global Line Head of Political and Credit Risk. He is a chartered insurer and held roles at Liberty International and Chubb before joining the Channel Syndicate (now SCOR Syndicate) in 2014. He is based in London.