Managing a disparate range of country risks is among one of the key challenges facing international construction businesses. Q&A with Ruth Lux, Senior CPS Consultant at JLT Specialty
What are the common risks faced by businesses looking to establish operations in new territories?
For most ‘new territories’ means engagement with the emerging market countries. The opportunity is significant but political risk can be an inhibitor.
A deterioration of the economic outlook for the country concerned and/or a worsening of its international relationships can present serious threats across the investment, trading and security environments.
The results are varied, ranging from government interference (whether physical e.g. confiscation of equipment or non-physical e.g. import/ export licence cancellation), government failure to honour contractual terms and pay for work done, through to violence that can delay operations (e.g. strikes) and threaten employees and the wellbeing of their families in country.
What is World Risk Review (WRR)?
World Risk Review (WRR) is JLT’s proprietary country risk rating platform.
It provides risk ratings across nine different perils for 197 countries.
Ratings are generated by a proprietary, algorithm-based modelling system incorporating over 200 international indices.
How can WRR help organisations either sponsoring or delivering construction projects?
By using a quantitative approach, firms engaged in construction projects can use the ratings to monitor how the risk environment across a portfolio of countries changes over time.
The ratings deliver, quickly and easily, an understanding of political risk in any given country to help you build your risk management strategy.
The WRR also supports the ability of our brokers to competitively place the risk in the market by differentiating between the perceived and actual risk associated with a particular project.
Our credit, political and security risks team can assist with the implementation of a comprehensive risk management solution, which includes insurance.
Does WRR provide a forward-looking assessment? If so, what events have you forecasted in recent years?
WRR ratings are updated monthly and provide a forecast on the risk environment in the short to medium term.
Ratings are not designed to predict specific events, but rather give an indication of the risk level in a given country over the coming months.
For further information, please contact Eleanor Smith, Political Risk Analyst on +44 (0)121 626 7837