The increase indicates ‘confidence’ and ‘stability’ in a market that has experienced global economic uncertainty, says head of broking

Total notional credit and political risk insurance (CPRI) capacity per transaction increased by 20% to $4bn (£3.3bn) as of 31 January 2023 – up from $3.4bn (£2.8bn) last year.

This was according to Willis Towers Watson’s (WTW) latest Credit and political risk insurance capacity survey and market update 2023, published 6 March 2023.

Looking at specific CPRI products, WTW found that capacity per transaction for contract frustration (CF) increased by 19% to $4,054m (£3,350m) – up from $3,396m (£2,807m) in January 2022.

Transactional credit (CR trade) rose by 17% to $3,040m (£2,512m), compared to $2,595m (£2,145m) last year.

Meanwhile, transactional credit (CR non-trade) increased by 37% from $1,651m (£1,364m) in 2022 to $2,257m (£1,865m) this year.

Political risks (PR) also saw a 14% increase to $3,940m (£3,256m) in January 2023 – up from $3,461m (£2,860m) in 2022.

WTW polled 58 insurers across Lloyd’s and company markets in January 2023. Of these, 49 had expanded on their appetites and capabilities.

Market resilience

Emma Coffin, WTW’s head of broking for global financial solutions, said that the “three main CPRI perils” had “experienced growth over the past two decades”, despite experiencing “various market cycles across the Covid-19 pandemic and the resulting lockdowns”.

She added that this “continued and steady increase in capacity within the CPRI market denotes its stability” as well as “confidence in this sector”.

WTW also found that insurers’ top three countries in terms of exposure were the US, UK and Nigeria.

The top industry exposures, on the other hand, were financial institution, sovereign, oil and gas.

Coffin added: “Oil and gas has declined from first place to third place in respect of top industry exposures and this survey also highlights a marked rise in renewables and environmental, social and governance (ESG), with a positive shift in the number of markets able to support clients with challenging financing structures.

“We foresee all these positive trends continuing in 2023.”

WTW only recorded data once where insurers surveyed had both Lloyd’s and company market capabilities.

  • Insurance Times has converted dollar amounts into pounds using an exchange rate of $1.21 = £1, which was correct as of 1 March 2023.