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Political risk asset coverage programme
Implementation of a global insurance policy designed to protect the assets of an international group operating in five high-risk countries in West Africa. The objective of the programme was to maximise coverage of potential losses while optimising cost and the availability of insurance capacity.
The AU Group team
Loïsa Catrice-Ranunkel
Director | AU Group Structured Solutions & Political Risks
Challenge adressed
A group with a long-standing presence in numerous African countries is seeking coverage against heightened political risks, despite a contraction in available insurance capacity.
Assets to be covered:
Real estate, mobile equipment, inventories, offices, cash held in bank accounts, and dividends.
Triggering events:
- Confiscation, expropriation, nationalisation or forced divestment
- Withdrawal of operating licences
- Loss of assets resulting from forced abandonment
- Freezing or blocking of bank accounts
- Currency inconvertibility and non-transfer of dividends to the parent company
- Physical damage resulting from political violence
Key challenge: to persuade insurers to accept coverage for these high-risk countries and to include within the scope of insured assets atypical items such as cash held in bank accounts and blocked dividends, as well as barges or vessels immobilised at berth.
- Role
- AU Group oversaw the full structuring of the risk syndication with leading insurers, including the drafting and negotiation of the policy wording, as well as the technical coordination between all stakeholders.
- Sector
- Engineering solutions and industrial works
The proposed solution
Building on the insured’s long-standing presence in the region and its high level of integration within the economic and political environments of each country, AU Group designed an insurance programme combining Confiscation, Expropriation, Nationalisation and Forced Divestment (CEND), Political Violence and Terrorism (PVT), and Currency Inconvertibility / Non-Transfer covers, in order to provide integrated protection for the Group’s physical and financial assets. Through close and constructive dialogue between all parties, AU Group secured specific extensions covering cash held in bank accounts, blocked dividends and capital transfer restrictions, thereby delivering comprehensive protection against governmental measures and political unrest likely to impact business continuity.
This bespoke solution enabled risk pooling under a single insurance policy, involving a syndicated placement with four leading insurers.
The adopted approach consisted of tailoring coverage limits by asset type and by country, while maintaining an overall cap consistent with the consolidated value of the exposed assets.
Our expert's opinion
A well-structured PVT/CEND insurance cover can serve as a strategic lever to safeguard operational continuity and asset value in unstable geopolitical environments.
Loïsa Catrice-Ranunkel, Director | AU Group Structured Solutions & Political Risks
Our role and contribution
Securing insurer commitment despite constrained political risk capacity in West Africa
In-depth negotiations ensuring comprehensive asset coverage at a controlled cost.
Programme underwritten by a syndicated panel of four leading international insurers.
Innovative clauses covering cash held in bank accounts, non-transferable dividends and floating assets.
Results
Combined insurance policy with
a 2 year
term
100%
of assets covered
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