Political Risk loss frequency surges in 2022 to become “everyone’s risk” as Ukraine war delivers widespread financial losses

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[{"type":"text","content":"LONDON, April 18, 2023 (GLOBE NEWSWIRE) -- Nine out of ten companies have suffered a political risk loss in the past year, transforming Political Risk from a low frequency, high severity peril into “everyone’s risk,” according to How are global businesses managing today’s political risks a new report by WTW (NASDAQ: WTW), a leading global advisory, broking, and solutions company. The 6th annual political risk survey produced by WTW, found that a 92% of all responding companies experienced a political risk loss in 2022, up from 35% in 2020. Other findings include: 86% of Western European respondents reported a net negative financial impact from the conflict in Ukraine33% of North American firms suffered a net negative financial impact48% of respondents reported a direct political risk loss in one or more BRIC countries100% of responding companies enhanced their political risk management capabilities since February 202268% now purchase political risk insurance, compared to 25% in 2019Nearly 50% predict deglobalization will “greatly strengthen”42% say decoupling from China will “greatly strengthen” The ongoing conflict in Ukraine and resultant humanitarian consequences have had a business impact that one European respondent described as “devastating”. A US technology-company respondent said: “We have decided to end all our operations in Russia and Belarus. We suffered a loss of almost $1 billion.” Top Risks 2023, respondent mentionsUkraine13Decoupling from China12European crisis/European rules10Economic nationalism7Serious ESG6US uncertainty6Rich-world social instability5Contested geopolitical alignments4Taiwan4Bigger government4 Whatever the financial impact, the shock of war on the European continent had triggered a “paradigm shift,” one respondent said. According to an executive in the automotive sector: “Business and politics have lived in two different realities. The events of the past year have now aligned realities.” Looking to the year ahead, Ukraine heads the list of interview panel members’ top risks for 2023, followed closely by decoupling from China and crisis and new regulations in the EU. “Panelists were worried about the escalation of the conflict in Ukraine, but more worried about complications like sanctions and inflation,” said Sam Wilkin, Director of Political Risk Analytics at WTW. “They’re worried that they cou...

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