Rising geopolitical rivalries, uncertain government policies, and competition for critical minerals are reshaping global risks and increasing demand for protection, according to a new report by Howden.
In its latest Credit and Political Risk Insurance (CPRI) report, Howden revealed that demand for political risk insurance has jumped by one-third. This surge is driven by ongoing instability in the geopolitical and economic landscape.
Despite this increased demand and strong underwriting performance, the CPRI market is growing more slowly than other insurance sectors. Since 2019, trade credit premiums have grown at less than half the rate of property and casualty insurance and only a fifth of the growth seen in cyber insurance.
Howden argues that the current moment presents a unique opportunity for the CPRI sector. The report calls for more insurers to enter the market and for existing providers to expand into new asset classes and regions. This expansion could help the $50 billion CPRI and surety market diversify its risk portfolio and better serve businesses adapting to global changes.
Market Strength and Potential
The report highlights that the CPRI and surety market is now larger than many other specialty insurance areas, including marine and energy. Despite recent global shocks, the market has consistently delivered strong financial results. Trade credit, for example, has maintained net combined ratios between 70% and 80%—a sign of efficient and profitable underwriting.
Still, premium growth in the sector lags behind more rapidly expanding areas like cyber insurance. The report suggests that CPRI offers a strong value proposition, helping companies navigate global volatility while maintaining stable returns for insurers.
A Tool for Economic Growth
Howden also points to the potential of underutilized asset classes within the CPRI space. These areas offer promising underwriting opportunities and could help businesses gain the confidence to expand into new regions. In doing so, the insurance sector can play a key role in supporting global economic development in an increasingly uncertain world.
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