30 March 2026
Structured Credit and Political Risk Insurance Market Update
Q1 2026
In the latest edition of Gallagher’s Structured Credit and Political Risk (SCPR) Insurance Market Report, we provide an up-to-date reflection of the market’s capacity, notable market moves since our Q3 2025 edition and a handful of country reports compiled by Pangea-Risk.
The SCPR insurance market continues to grow, both in the number of insurance companies, syndicates and MGAs writing the class and in the total capacity available to buyers. Total capacity for contract frustration, where the counterparty is a sovereign entity, has exceeded USD4 billion for any one transaction for the first time, with the other risk codes (PR and CR) not far behind.
Increasing amounts of capacity typically lead to a softening of rates, with buyers of insurance benefiting from increased competition between insurers. To some extent, this principle has affected the SCPR market with pricing demands — particularly as a percentage of bank margin — often falling well below historic levels. However, high sovereign debt burdens and elevated levels of political volatility mean that the underlying risks remain high, and this has weighed on pricing.
One sector where the risks and rewards facing investors and lenders are perhaps most evident is the natural resources sector. Many minerals have seen rapid price increases in the last twelve months, driven by the artificial intelligence boom, trade policy uncertainty and sovereign credit concerns, which has in turn fueled a competition between governments to secure critical mineral supply chains.
Gold is perhaps the most obvious example of this, given its use as a safe haven for investors. In twelve months, an ounce of gold has gone from around USD3,000 to USD5,000. Similarly, silver, copper, nickel, lithium and other minerals have seen substantial gains. However, while this has led to better profits for many companies, it has also led to an increased threat of resource nationalism, as governments are renegotiating mining codes to ensure a more equitable share of profits to help bolster their finances. Furthermore, instances of war and political violence have increased, with mineral production often one of the targets for the militants. The SCPR insurance market remains committed to supporting this sector through its life cycle,
providing significant amounts of capacity to lenders, sponsors, traders and corporates.
We continue to produce this report in conjunction with Pangea-Risk, who have provided us with the concise country risk reports and the risk map. Their expertise continues to support us and our clients in enhancing our understanding of global risk landscapes. The Pangea-World Global Risk Ratings are based on proprietary methodology using a default high-risk score and reproduced for Arthur J. Gallagher (UK) Limited. More details are available at www.pangea-risk.com.
Product Glossary
On behalf of our clients, Gallagher’s Structured Credit and Political Risk team arrange insurance products to mitigate the risks arising out of trading, financing and investing — often with a focus on developing markets.
Click to view a full glossary of the terms referenced in this page.
INTERPRETING THE NUMBERS
The Lloyd’s market uses risk codes to track the cover being provided. The applicable risk code is determined by the characteristics of the underlying loan, trade, contract, or investment being made. These risk codes are also recognised by non-Lloyd’s insurers. Later in this report, we provide market capacity data by risk code for each insurer. To assist with the interpretation of this data, below we summarise the primary risk codes, as well as the main types of insurance that relate to these risk codes.
As advised previously, the Financial Guarantee (FG) risk code is no longer used for the insuring of unsecured non-trade finance. However, as many insurers still have different underwriting capabilities depending on whether the financing is for ‘trade’ or ‘non-trade’, we use the letters ‘NT’ to show the capacity for underwriting the latter (please note NT is not a formal risk code).
RISK CODES
Credit Risk (Risk Code CR) Applicable where the counterparty risk insured is a commercial entity with a majority private ownership.
Contract Frustration (Risk Code CF) Applicable where the counterparty risk insured is a government entity, or a commercial entity controlled and/or majority-owned by a government entity(ies). Alternatively, this risk code is applicable where the counterparty risk is a privately owned commercial entity, but the perils insured are limited to political risks.
Political Risk (Risk Code PR) Applicable where the cause of loss is limited to government frustration and/or political perils.
Non-Payment (CR, CF, or NT) • Indemnifies the policyholder for loss caused by the failure and/or refusal of an obligor to honour its contractual debt obligation.
Non-Delivery/Pre-Finance (CR or CF) • Indemnifies the policyholder for loss caused by the failure and/or refusal of a supplier to honour its obligations under a prefinanced supply contract or return pre-financed sums.
Pre-Shipment Insurance (CR or CF) • Indemnifies the policyholder in circumstances where, prior to the establishment of an amount owing under an export contract, the buyer terminates the contract (in circumstances where they have no right to do so), or where there is an occurrence of certain pre-defined political perils that prevent the fulfilment of the contract. • Can be combined with Post-Shipment Insurance to form ‘Pre and Post Shipment Cover’.
Post-Shipment Insurance (CR or CF) • Indemnifies the policyholder in circumstances where, after the establishment of an amount owing under an export contract, the buyer fails to pay sums due, or is unable to, as a consequence of the occurrence of currency inconvertibility and/or exchange transfer. • Can be combined with Pre-Shipment Insurance to form ‘pre and post shipment cover’.
Political Risk Insurance (PR) • Indemnifies the policyholder for loss caused by government frustration and/or political perils, including but not limited to: – Confiscation, Expropriation, Nationalisation, Deprivation (CEND). – Forced abandonment or divestiture. – Selective discrimination. – Licence cancellation. – Political violence and terrorism (including strikes, riots, civil commotion, malicious damage, and sabotage). – War and civil war. – Currency inconvertibility and/or exchange transfer. • Cover can be placed in respect of assets or the repayment of debt.
Pangea Risk Emerging Market Review
This section, and the commentary on specific countries which follows, has been compiled in association with Pangea Risk.
Egypt
Egypt’s political environment will remain shaped by an executive-centred system, supported by controlled electoral processes and a managed parliamentary composition. Elite networks aligned with the presidency will retain influence across legislative institutions, limiting the scope for internal policy divergence. Security conditions will continue to reflect localised militant activity, entrenched criminal networks and persistent border pressures linked to Sudan and Gaza, though state control in major urban centres will hold. The investment landscape will be anchored by Gulf commitments structured around land monetisation and long-horizon real estate development, supported by the Sovereign Fund of Egypt’s role in preparing state assets. Macroeconomic conditions will be influenced by renewed access to external financing, including sukuk issuance and official inflows, amid persistent inflationary pressures and a heavy interest burden. Foreign currency availability will remain adequate but uneven across sectors, and fiscal adjustment will continue to rely on primary surpluses and reduced subsidy exposure.
Tanzania
Tanzania’s disputed general elections in October 2025 triggered the country’s worst political crisis in decades. President Samia Suluhu Hassan secured 97 percent of
the vote in a tightly controlled poll that excluded credible opposition candidates, while the long-ruling Chama Cha Mapinduzi (CCM) secured over 90 percent of parliamentary seats. The outcome provoked widespread unrest across major
urban centres, where security forces used live ammunition and mass arrests to suppress demonstrations. At least 1,000 people were killed, and a countrywide internet blackout paralysed mobile money networks and disrupted regional trade corridors. The heavy-handed response has deepened public resentment toward the CCM and exposed internal party factionalism and state security impunity, including an informal task force linked to the president’s family. Looking ahead, investor confidence, previously buoyed by Hassan’s reformist narrative, and donor engagement will be tainted by governance concerns, delaying budgetary support.
Democratic Republic of Congo
In the DRC, insecurity in the eastern provinces remains the principal threat to political stability and commercial operations. Armed violence continues to be driven by a fragmented conflict landscape, with the Rwanda-backed M23 consolidating territorial control across parts of North and South Kivu since early 2025. Despite a US- and Qatar-brokered peace agreement signed by the DRC and Rwanda, the deal has yet to translate into improved security conditions. Within days of the signing, M23 further expanded its territorial hold, underscoring the limited capacity of state-level accords to restrain non-state armed actors.
The Congolese armed forces continue to suffer from weak command structures and reliance on local militias. Simultaneously, increased state intervention in the extractive sector, notably through recent cobalt export quotas and expanded trading roles for state-owned entities, has heightened regulatory, transparency and contract enforcement risks for mining operators, even as mineral cooperation with the US deepens.
Indonesia
President Prabowo Subianto and his supermajority coalition will remain firmly dominant, though the large-scale protests and violence seen in late August and early September underscore persistent socio-economic frustrations. The severe flooding and cyclone damage across northern Sumatra have further strained public finances and disrupted industrial supply chains, tempering growth prospects that were previously expected to remain near 5 percent in 2025 to 2026. From January 2026, strict new foreign-exchange retention rules will constrain liquidity for natural resource exporters and elevate currency transfer and operational risks.
At the same time, the government’s sweeping environmental enforcement campaign — including multibillion-dollar fines and extensive land seizures — signals structurally tighter regulatory conditions for mining and plantation firms. Industrial policy will continue to prioritise downstream processing and local content mandates, sustaining contract volatility. Corruption risks remain elevated despite several high-profile investigations over the past year. Security threats are largely localised to Papua Province due to the longstanding but low-level insurgency.
Kazakhstan
President Kassym-Jomart Tokayev continues to strengthen his authority, empowering his allies across politics, business and security agencies while isolating elites linked to former President Nursultan Nazarbayev. Tokayev’s administration has
adopted a managed approach to limited economic liberalisation while systematically restricting opposition and civil society activism. Kazakhstan has a relatively healthy macroeconomic base, offering a more attractive operating environment than its Central Asian neighbours. Nevertheless, businesses, especially hydrocarbons and mining, face slightly elevated risks of contract alteration, taxation shifts and bureaucratic inefficiency.
Major arbitration claims and a push to revise production-sharing agreements with foreign oil companies underscore enduring state interventionism. Although corruption reforms are ongoing, inconsistent enforcement and uneven progress hinder tangible
improvements. Kazakhstan remains vulnerable to external shocks due to its heavy reliance on oil exports. Although the stable domestic security situation is highly conducive to commercial operations and tourism, increased Ukrainian attacks
on Russian oil infrastructure used by Kazakhstan have disrupted oil production and exports.
MARKET UPDATES, JANUARY 2026
AXIS
Dave Watson joined the team as senior underwriter in December 2025, and Christophe White started as unit head in January 2026.
ATRIUM
Richard Lamb, Adam Vulliamy and Beth McGregor have started at Atrium as of January 2026.
BLENHEIM PARTNERSHIPS
Ed Parker has joined Blenheim Partnerships as senior underwriter. He was previously head of special risks at Tokio Marine Kiln.
CANOPIUS
Norm Kimber has joined Canopius from Swiss Re as underwriter.
BRIT
Wes Masters joined as an underwriter from The Hartford in November 2025.
WESTFIELD
Harry Mahon joined in October 2025 as underwriter, and Ben Corbett will be joining the team as senior underwriter in February 2026.
NAVITAS
Karan Anand has joined Navitas as head of risk for Europe. Karan previously worked for Shell, Unipec and SEFE.
LIBERTY
Luke Franks has started at Liberty as an underwriter from SCOR.
CHAUCER
Chaucer has hired Jennifer Wilson from Liberty as class underwriter.
KILN
Kiln has hired James Wilson from The Hartford as head of special risks.
FIDELIS
Ed Cockburn has joined Fidelis as an underwriter from Chubb.
Let's talk
DAVID EVANS
Managing Director, Structured Credit and Political Risk
T: +44 7771 598 045
RUPERT MORGAN
Chairman, Structured Credit and Political Risk
T: +44 7584 609 382
JUSTIN PRIESTLEY GM
Managing Director, Crisis Management & Another Day T: +44 7779 702 377
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