29 September 2026
Structured Credit and Political Risk Insurance Market Update Q3 2026
The past six months have been marked by a series of global and regional developments which have significantly influenced the Structured Credit and Political Risk (SCPR) insurance market. Gallagher's latest report examines these events whilst offering insights into the evolving risk landscape and the market's response to emerging challenges.
The Middle East remains a focal point of geopolitical tension with the ongoing Iran crisis exacerbating regional instability. Escalating tensions between Iran and US aligned western nations have heightened risks for businesses operating in the region. The SCPR insurance market has seen increased demand for coverage as organisations seek to protect their trade and investments against potential disruptions including sanctions, political violence and contract frustration risks. The region's strategic importance for global energy markets further amplifies the need for robust risk management solutions.
The global economy continues to face headwinds including persistent inflation, rising interest rates and geopolitical fragmentation. These factors have created a challenging environment for those businesses operating in emerging markets where sovereign debt levels are high. Political volatility in regions such as Latin America and Sub-Saharan Africa has further highlighted the importance of SCPR insurance in mitigating credit and political risks.
The increasing frequency of climate-related disasters has brought environmental risks to the forefront of global concerns. In parallel, the race to secure critical minerals for renewable energy technologies has intensified leading to a rise in resource nationalism. Governments in resource-rich countries are renegotiating mining agreements to secure a larger share of both ownership and profits creating additional challenges for investors and lenders. The SCPR insurance market has responded by offering tailored solutions to address these complex risks.
Amidst these challenges, the FIFA World Cup served as a unifying event, bringing nations together in celebration. Such moments of global unity highlight the interconnectedness of the world even in times of political and economic uncertainty.
Gallagher remains committed to supporting its clients through these turbulent times, utilising its partnership with Pangea-Risk to provide detailed country risk reports and actionable insights. By staying at the forefront of market developments, Gallagher continues to empower organisations to navigate the complexities of the global risk landscape with confidence.
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.
Indonesia
President Prabowo Subianto and his coalition remain firmly dominant, but policy credibility remains under scrutiny. Energy pressures have eased since the US-Iran deal and subsequent fall in global oil prices, reducing the immediate strain from fuel imports and subsidies. However, the Gulf War exposed Indonesia’s sensitivity to oil shocks, a weaker rupiah, trade deficit pressure, and the fiscal cost of fuel controls and biofuel mandates. The government is still prioritising price stability, downstream industrialisation, and resource nationalism, sustaining regulatory and contract uncertainty in mining, plantations, and strategic sectors. Tighter foreign exchange documentation has increased administrative friction for businesses without amounting to full capital controls. Investor sentiment remains fragile after ratings outlook downgrades, currency volatility, and concerns over fiscal discipline and policy intervention. Security risks are mostly localised to Papua, where separatist attacks on aviation and remote operations continue to pose a material threat for companies operating outside major cities.
Iraq
Iraq’s political and security environment will likely face greater pressure as the new government attempts to consolidate authority over armed factions before the planned US military withdrawal. Regional conflict may expose Iraqi facilities to retaliation, while disputes over access to dollars and oil revenues will complicate financial management. Oil exports should continue supporting sovereign liquidity, but interruptions to export routes or weaker production could widen fiscal pressure. Foreign investment is likely to expand, although contract execution remains exposed to federal-Kurdistan disputes, corruption investigations and security disruption. Customs measures and tighter financial controls will increase operating costs for importers and banks. Electricity shortages and public service failures may sustain localised protests, particularly during peak summer demand. Organised crime and trafficking will continue affecting border regions and commercial networks. The coming year is likely to bring stronger state efforts to centralise security and financial control, alongside continued competition from armed and political actors domestically.
Libya
SLibya’s political balance is likely to become more unstable as the resignation of Central Bank Governor Naji Issa reopens institutional competition between western and eastern authorities, while the June electoral roadmap remains dependent on agreement over the interim executive and electoral framework. Public mobilisation in western Libya may persist if electricity shortages and fuel costs deteriorate, particularly where protests affect energy infrastructure. Oil production should support sovereign liquidity, but renewed disputes over revenue allocation or Central Bank control could disrupt budget execution and foreign exchange management. Investment in oil and gas is likely to increase, although security incidents around Zawiya and Mellitah may complicate project execution and contract performance. Foreign exchange pressure may increase following the January devaluation and renewed parallel-market weakness. The main operational shift is towards greater exposure around critical energy infrastructure, as civil unrest, armed actors and criminal networks increasingly intersect with commercial assets and supply systems.
Rwanda
Political authority in Rwanda remains consolidated under President Paul Kagame and the ruling Rwandan Patriotic Front. The appointment of Prime Minister Justin Nsengiyumva reinforced policy continuity while incorporating a younger technocratic cabinet. No political opposition activity or large-scale unrest has been recorded. The economy continues to expand, driven by infrastructure investment, construction, and services, though growth will moderate due to higher import costs driven by the Gulf War. The USD 250 million IMF programme, improved tax mobilisation, and concessional borrowing support fiscal and debt-service capacity, although large infrastructure projects will sustain external financing needs. US sanctions on the Rwanda Defence Force and a gold-refining network increase compliance risks for military-linked and mineral-sector transactions. Continued hostilities in eastern Democratic Republic of the Congo will likely sustain diplomatic pressure and cross-border security risks, while Rwanda’s domestic operating environment remains orderly and predictable.
Zambia
President Hakainde Hichilema secured a second term in the 16 August 2026 elections. His re-election will likely preserve Zambia’s policy direction and support engagement with creditors and mining investors. His legislative majority may strengthen his authority to pursue a new IMF programme and maintain fiscal consolidation, while the completion of most debt restructuring and record copper prices support the country’s external position. The administration will likely seek to accelerate mining investment and increase copper production, although electricity shortages and limited smelting capacity will likely delay fiscal gains. Limited fiscal space will also constrain Hichilema’s ability to fund campaign commitments and clear arrears owed to government suppliers. Public frustration over socioeconomic conditions may intensify demands for the administration to translate macroeconomic stabilisation into improved incomes, employment, and public services. Opposition parties may channel dissatisfaction through legal challenges and localised demonstrations in the short-term, but they are unlikely to disrupt government processes.
Market Updates, July 2026
Allianz Trade
Adelle Vaz joined the team as Underwriter in March 2026 and James Bloxham joined as Senior Underwriter in May 2026.
Chaucer
Dmitry Marinchenko moved to Chaucer as Senior Credit Analyst in January 2026.
QBE
New Senior Underwriter, Aycan Sen, joined the Trade Finance Solutions team from Fidelis as of July 2026.
DUAL
David Lineham has started at DUAL Group as Managing Director, Credit Risk Insurance.
BRIT
Max Newby joined as Underwriter from Atradius in June 2026.
Convex
Jake Holberry moved to Convex from Chaucer in February 2026.
HDI
In April 2026, Sam Ouin joined HDI from Aspen as Underwriting Manager.
Atradius
In August 2026, Jock Walker-Munro started at Atradius as Underwriter from Lancashire.
MSIG USA
MSIG USA have hired Charles Busch from Vantage as Underwriter.
Liberty
Former CEO of Aurum Specialty, Tim Phillips, has joined Liberty.
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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