The 17th annual Political Risk Map

Political and financial instability remain a feature of the business landscape as a result of the recession, according to Aon Risk Services, the global risk management and insurance brokerage business of Aon Corporation. The company launched its 17th annual Political Risk Map in a global webcast this week.

Miles Johnstone, director of Aon's Political Risk team, explained: "Rising risk levels in 2009 have led to a significant volume of credit and political risk claims in international insurance markets, which is driving many of the 18 downgrades in this year's map. For instance, non-payment of sovereign and sub-sovereign debt obligations is a major issue for underwriters insuring risks in Ghana, and underwriters continue to experience a multitude of claims stemming from payment defaults by private sector banks in Ukraine."

The 2010 map introduces new indices looking at food, agricultural commodity and water supplies.

Movements on the 2010 Map

Nine countries have been upgraded to a lower risk level: Albania, Myanmar/Burma, Hong Kong, Colombia, South Africa, Sri Lanka, East Timor, Vanuatu and Vietnam.

Eighteen countries have seen conditions worsen leading to a downgrade: Algeria, Argentina, El Salvador, Equatorial Guinea, Ghana, Honduras, Kazakhstan, Latvia, Madagascar, Mauritania, Philippines, Puerto Rico, Seychelles, Sudan, United Arab Emirates, Ukraine, Venezuela and Yemen.

Sudan, Venezuela and Yemen have been added to the Very High category, joining Afghanistan, Congo DRC, Iran, Iraq, North Korea, Somalia and Zimbabwe.

Miles Johnstone concluded: "Aon believes 2010 will see elevated political risk levels continue before an overall tendency for improving global business conditions becomes established. For many companies and across different sectors, including credit and political risk insurance, the business environment remains uncertain when trading with or investing in politically or economically unstable countries."

"With a global business landscape that continues to shift and change, our interactive Political Risk Map provides our clients with up-to-date and relevant tools to assess the various contingencies and determine the impact on their ability to ensure continued survival, growth and profitability."

For more information, visit http://www.aon.com/2010politicalmap

•Date: 28th Jan 2010 • Region:World •Type: Article •Topic: Operational risk
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