Recent political unrest in Cairo and other cities across Egypt highlights the complex risks companies investing, manufacturing, and trading in emerging markets must be prepared to manage, says Marsh.
Commenting on recent developments, Evan Freely, Global Head of Marsh’s Political Risk and Trade Credit Practice, noted: “We have already seen companies across a number of industries affected by acts of political violence in Egypt, including those in the oil and gas, hospitality, and real estate sectors as well as professional services firms and financial institutions. Affected companies should be gathering as much information as possible to prepare for the claims process.”
Some buyers of terrorism insurance, such as those operating in Thailand, for example, have found themselves without cover following civil disturbances due to disagreements about whether certain events were acts of terrorism or political violence.
“These incidents in Egypt should cause every company with operations in emerging markets to re-evaluate the adequacy of their risk management strategies,” added Freely. “Companies need to make sure that they have insurance coverage for a broad range of perils, reducing uncertainty that can be caused over the classification of an event.”
Companies with operations in countries affected by political unrest face losses from risks such as business interruption, theft of and damage to property, threats to contract for both purchase and supply, late payments—potentially impairing cash flow. They must also have plans in place to evacuate employees safely.