After a summer rich in geopolitical news, this return to school announces an equally full agenda. To name only the major events, the elections and the first months of presidents Trump or Macron, the endless discussions around Brexit, the recent events taking place in Venezuela, the military acts emanating from Pyongyang, or the terrorist threat. which is intensifying, it is clear that the political risk is becoming more and more present and is leading to a very uncertain global context.

TERRORISM, POPULISM, AND PROTECTIONISM IN MIND ...

The latest studies by the broker Aon and the credit insurer Coface shed light on the nature of these risks and their impacts. First of all, the increase in the number and frequency of terrorist acts has a strong impact on the behavior of individuals and businesses. These two populations are the most affected by these risks.

Also, and rightly according to previous studies, companies fear a rise in protectionism and anti-globalization leading to potential financial losses. According to Euler Hermes, there are between 600 and 700 new trade barriers erected each year around the world since 2014.

Declining growth, fluctuations in monetary prices, or even human losses, political risk has significant and damaging impacts on a large number of players.

A TIMID BUT GROWING RESPONSE FROM INSURERS

Like the interactive risk map published each year by Aon Risk Solutions, insurers are aware that political risk is a growing concern among their clients. This is also the case more recently with WeSpecialty, which launched a specific “ Political Violence - Terrorism - Political Risk ” offer last year.

Canopy, the name of the offer developed with the insurer Hiscox, aims to cover the risks of political violence, terrorism, and political risks in the London and continental markets. The target audience concerns manufacturers, commodity traders as well as international companies whose markets correspond to areas considered sensitive. With coverage ranging from the protection of interests and mobile or static assets to the consequences of a political hazard, this insurer intends to continue its development in specialized markets.

There are around sixty insurers around the world offering this type of cover, the clients of which are mainly multinationals. The complexity of their business lies in the difficulty of offering guarantees in certain countries where the risk would be the highest for subscribers.

While it is reassuring to see that insurers allow professionals - who are the first to be affected by political risk - to cover themselves against potential damages, the speed at which these risks increase and their complexity raise the question of the adequacy of the policy. insurance offer with the real needs of the players operating on the front line in this unstable context.

What are the benefits for policyholders?

In an environment of data collection and analysis strictly framed by regulations and in perfect transparency vis-à-vis policyholders, personal data can have many advantages for those most concerned. Indeed, the personal information collected by insurers can allow them to:

• Offer offers and premiums that are closer to the reality of each insured (driving behavior, frequency of vehicle maintenance, etc.)
• Transform a relationship based on the treatment of a claim into a support and prevention relationship about the risks incurred (monitoring of physical activity and illnesses already encountered within a family, etc.)
• Controlling expenses as effectively as possible (monitoring water and electricity consumption, etc.)
• Offer more proactive offers (new insurance in the event of a birth or move, etc.)

In this context, personal data would be placed in a value proposition for the benefit of policyholders, for more prevention, more flexibility and more “fair” pricing of the risks incurred.

Personal data is a major issue of concern for consumers today. Without supervision, the risks of dishonest use are significant and continue to grow. This statement is all the more true in insurance, a sector that uses this data to best quantify the risks that the players in the sector cover. Personal data is, in fact, a major lever of innovation for insurers, but their use, in addition to being framed by regulations, must necessarily be part of a relationship of trust and transparency with policyholders, to justify its accuracy and usefulness.