Jack Suk, Underwriter, Political Risks & Trade Credit, Asia Pacific, Beazley said: “Materials vital to the energy transition and development of electric goods are an increased focus for companies. As some developed countries look to move their supply chains away from China, this is becoming a point of friction as most businesses are currently reliant on China for the supply of electric vehicles as well as its processing capabilities”
Singapore:
As elections loom across the globe, a survey of over 3,500 global business leaders by Beazley revealed that 30% believe that political risk is the biggest threat they face this year, rising to 32% in Singapore.
In a period of heightened global tension and arguably, one of the most volatile global political landscapes in decades, the threat of political risk and violence is high on the risk radars of global business leaders with 36% of global executives believing they are operating in a high risk environment.
Beazley, the leading specialist insurer, has today published its latest Risk & Resilience report: Geopolitical Risk Snapshot 2024.
The report details how, in this era of accelerating geopolitical risk, businesses across the globe are navigating the political tensions caused by a bumper election year.
The research further showed that 70% of business leaders globally are concerned that the outcome of this year’s elections will impact their international operations and ability to trade, rising to 82% in Singapore.
Despite Singaporean businesses feeling exposed to political risks in what is an unprecedented election year, 16% of Singapore’s business leaders said they are unprepared for the threat of political risk and violence.
Political instability challenges the transition
The report also examines how political risk is impacting the global energy transition, especially in Africa where regime change, conflict, and coups in recent years have hindered the continent’s electrification and extraction of critical minerals required for the renewable energy transition.
Nine coups have taken place in West Africa, Central Africa and the Sahel region since 2020, posing a challenge to foreign investors with banks and other lenders demanding political risk and trade credit insurance be in place before committing to large energy infrastructure projects.
These factors combined with over 60 elections taking place this year are reflected in the rise of business leader concern over political risk which has increased to 30% this year, up from 25% in 2022.
Jack Suk, Underwriter, Political Risks & Trade Credit, Asia Pacific, Beazley said: “Materials vital to the energy transition and development of electric goods are an increased focus for companies. As some developed countries look to move their supply chains away from China, this is becoming a point of friction as most businesses are currently reliant on China for the supply of electric vehicles as well as its processing capabilities.”
Roddy Barnett, Head of Political Risks & Trade Credit, Beazley said: “Our research reveals that the current geopolitical environment is creating a feeling of instability for businesses of all sizes, and how specialty insurance can play a vital role in bringing some financial reassurance to them. Amid growing political tensions across the globe, standalone cover for political risk and trade credit, political violence, strikes, riots and civil commotion is increasingly important. As businesses become exposed to a growing range of perils, the need to move away from pure terrorism cover is apparent, with businesses in major Western democracies being particularly affected.”