Capital Risks

Organisations with international operations are often exposed to counterparty and country risks. All balance sheets can benefit from the structured use of credit and political risk insurance – the diversity of JLT's clientele reflects this. Our clients include niche operators as well as global leaders – international banks, commodity traders, exporters, investors, manufacturers, plant and equipment operators and overseas retailers.

JLT has been a leader in political risk insurance since the advent of this market in the early 1980s. We were the first broker to establish a specialist broking firm in Asia in 1996. Over the years,we have built strong relationships with all insurers in this sector. At any one time we manage upwards of US$40 billion of insurance capacity globally and we have had extensive success in collecting claims on our clients' behalf.

The insurance contracts we arrange relate to a wide variety of transactions and exposures – a consequence of our diverse client base. These include :

• Credit and/or performance risk for government-owned and/or private counterparties – whilst key to traders and exporters, this product is of increasing interest to banks as JLT's credit insurance policy has been confirmed as meeting the requirements of an effective risk mitigant in the context of the Basel II agreement
• Investment risk – often referred to as country risk, this product addresses risks such as confiscation, expropriation, nationalisation, deprivation, currency inconvertibility, war risks and other political force majeure including forced abandonment and breach of contract by a host government. This is particularly valuable to companies involved in the extractive industries, infrastructure projects, manufacturing industries and global retail or distribution
• Fixed asset risk is similar to covering investments. This product can be implemented as an adjunct to a standard property 'all risks'
• Mobile asset risk relates to mobile plants, equipment, stocks or commodities and other movable assets. Again, this coverage is similar to investment risk and is often adopted with specific adaptations, depending on the nature of the assets insured
• Contract risk, often referred to as contract frustration, involves situations where a contract might be frustrated by political force majeure. This product is often customised to cover credit risk and on demand bond risk
• Demand bond risk relates to a situation where an exporter or contractor is required to provide a bid, advance payment, performance, retention or warranty bond and involves the risk that the beneficiary might execute the bond outside the terms of the underlying contract, or as a result of political force majeure. Banks issuing bonds on behalf of clients may insist on this cover being put in place or indeed may require credit risk insurance on their customers applying for such bonds
• Business interruption or trade disruption risk