Rising geopolitical instability and macroeconomic volatility have triggered a 33% spike in demand for political risk insurance (PRI), according to a new report from Howden, titled Opportunity in Flux.
The report highlights how intensifying global rivalries, regulatory unpredictability, and a strategic scramble for critical minerals are reshaping the risk environment, fueling a surge in interest for credit and political risk insurance (CPRI) solutions.
Underwriting Strength Despite Slower Growth
Despite the rising demand, certain CPRI segments—particularly trade credit—have seen relatively modest premium growth when compared to other high-performing lines. Since 2019, trade credit premium growth has been less than half that of property & casualty and a fifth of that seen in cyber insurance, the report noted.
However, the CPRI market remains sizable and well-capitalized, with an aggregated premium base of US$50 billion, surpassing markets such as marine and energy. This positions it well to diversify further and expand into emerging risks and underinsured geographies.
A Market Poised for Expansion
With broader insurance markets entering a soft cycle, Howden sees a pivotal moment for the CPRI market to attract new entrants and encourage established players to innovate and expand into new asset classes.
The report emphasizes the sector’s strong track record, noting trade credit’s net combined ratios consistently fall within the 70–80% range—performance that rivals the most profitable insurance lines.
Matthew Strong, Deputy CEO of Howden CAP and Head of Credit and Political Risk, remarked:
“The CPRI market’s outstanding long-term performance is a testament to the deep sector expertise that pervades the value chain. With demand for protection rising, now is the time for the market to step up even further, enhancing global economic growth and providing the certainty needed for confident investment and trade.”
Call to Action for Innovation and Flexibility
Phil Bonner, Managing Director, Global Specialty Treaty at Howden Re, added:
“Opportunity is the key takeaway. Yes, global risk is up, but helping clients invest and operate through this uncertainty is exactly what CPRI was built for.
“The market must respond not only with capacity but also with innovation—tailoring underwriting strategies to match evolving client needs.”
Looking Ahead
The report paints a picture of a market at a crossroads—one buoyed by consistent performance and rising demand, but facing the challenge of adapting to an increasingly fragmented global order.
As risk perception escalates among multinational corporations, lenders, and governments, Howden’s message to the market is clear: embrace flexibility, expand strategically, and reassert CPRI’s role as a cornerstone of global trade and investment resilience.
Related topics:
