London/Paris/New York/Singapore/Hong Kong/Dubai:

A new market report from London based specialist credit and political risk insurance (CPRI) broker BPL Global indicates that overall CPRI market capacity has seen a substantial increase across all product lines over the past three years – with the maximum lines for non-payment private obligor risks and public obligor risks rising by 30% to US$2.4bn and US$3.0bn respectively.


The Market Insight 2018 report, based on market surveys and analysis of BPL Global’s own portfolio, also highlights that there is significant capacity for non-trade related credit risks and project finance business.


For non-trade credit business the majority of total capacity – US$1.5bn – is available for policies with tenors of up to seven years, although there are still meaningful volumes (US$700m) remaining for risk tenors of 10 years.


Sian Aspinall, Managing Director, BPL Global, comments: “Our report shines a spotlight on the fact that appetite for the CPRI class is on an upwards trajectory – both in terms of capacity and tenors. Furthermore, analysis of market data clearly shows that it adapting its capabilities to match natural return on investment for areas such as project finance structures, providing coverage for up to 25 years. Also notable is the jump in capacity for non-trade related credit insurance to over US$1.5bn – an area previously constrained by Lloyd’s regulatory requirements – and increasing levels of coverage for transactions in OECD countries.


Since the global financial crisis (2007-2017), the market as a whole has experienced 438· claims made by banks and financial institutions, with 422 paid in full to the value of US$2.57bn.  The largest values of claims handled by BPL Global have been on contracts covering Ukraine· (US$509bn), Russia (US$195bn) and Brazil (US$187bn), says the report. 


Aspinall adds: “The value of insurance is only demonstrated at the point of claim and the market as a whole has made great strides to provide collated data illustrating this – some of which we showcase in our Market Insight report. This collation of statistics and cross-market data is vital for the market, helping to validate the purchase of the product, particularly when used for capital relief by banks and financial institutions.”


” Other key insights from the report include:  Analysis of BPL Global’s portfolio – which can be considered reflective of the market as a· whole – shows the volumes of exposure the market is willing to absorb, significantly in Africa (US$7.75bn), the Middle East (US$6.45bn) and Latin America (US$5.46bn).


Total exposure in BPL Global’s portfolio stands at US$41.1bn.  BPL Global’s total exposure in Europe stands at US$3.65bn, reflecting increasing coverage· for project finance and non-trade business in OECD countries.