Political Risk Latin America Blog @PolRiskLatam

Political Risk Insurance Industry Leaders Take Stock

Posted in News and Articles, Political Risk by politicalrisklatam on November 8, 2010

by Multilateral Investment Guarantee Agency, November 5th, 2010.

What a difference two years make. When industry leaders gathered for the 2008 MIGA-Georgetown Symposium on International Political Risk Management, the global financial crisis was just unfolding. At this year’s biannual conference, held on October 28, 2010, practitioners pondered the impact of the crisis on the political risk insurance (PRI) industry—but were also able to chart a way forward that presumes a fledgling recovery is taking root.

In her opening remarks, MIGA’s Executive Vice President Izumi Kobayashi reflected on the 2008 conference: “At that time, only two months had passed since the collapse of Lehman Brothers, yet we had already witnessed the beginning of a steep decline in foreign direct investment flows, not only to developing countries, but all over the world.” She noted that, while FDI is beginning to recover, the economic landscape is vastly different than it was a few years ago.

The event’s opening panel honed in on this very topic. Panelist James Bond of MIGA reeled off some of the more notorious events of the last two years—among them: the near collapse of Greece’s economy, an IMF bailout of Eurozone countries, Britain’s unprecedented austerity measure under a coalition government, quantitative easing by the Federal Reserve, and the continued long-term unemployment in the United States. Moreover, he noted that in this “upside-down” world, the developing world has become the engine of the world’s growth. Developing world economies are expected to grow overall by a robust 6.2 percent this year. So how has the PRI industry responded and where does it need to go? (continue reading… )

 

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