Gallagher Report Highlights Evolving Risk Landscape in Key Markets
Gallagher has released its latest Structured Credit and Political Risk (SCPR) Insurance Market Report, providing a detailed analysis of market capacity, recent developments, and country-specific risk assessments. The report, developed in collaboration with Pangea-Risk, examines how geopolitical and economic shifts are influencing trade, investment, and the role of SCPR insurance.
The report emphasizes the continued expansion of market capacity, noting that insurers are increasingly offering coverage for long-term risks. Global instability remains a significant factor, with a focus on the Middle East, Africa, and potential changes in economic and foreign policy, especially following a second term for Donald Trump.
Market Capacity on the Rise
The January 2025 market capacity update reveals increased underwriting capacity across various SCPR segments. Political Risk capacity has reached an estimated US$3.45 billion, up from US$3.35 billion in mid-2024. Contract frustration risks are supported by a capacity of US$3.57 billion, and commercial risk capacity has climbed to US$2.99 billion. The non-trade risks are covered by US$2.46 billion in market capacity, reflecting overall growth in the sector. This expansion is largely attributed to increased insurer participation and growing demand for SCPR coverage.
Emerging Market Risks
The report points to specific risks in several emerging markets. In the Democratic Republic of the Congo (DRC), ongoing insurgent violence continues to impact the political, security, and economic outlook. The M23 insurgent group launched a major offensive in early 2025, capturing key provincial capitals. In Ivory Coast, risks related to political violence and civil unrest are expected to rise ahead of the October 2025 presidential election, particularly if President Alassane Ouattara seeks a fourth term.
Saudi Arabia’s Economic Outlook
In Saudi Arabia, the economic outlook for 2025 will be influenced by several factors. These include lower interest rates, increased oil production, and large-scale domestic investment tied to Vision 2030. Public sector spending on infrastructure projects such as Neom and Diriyah Gate is expected to support private sector expansion. Potential political shifts in Syria, particularly following the collapse of President Bashar al-Assad’s government, could reduce Iranian influence and create economic opportunities. Domestically, efforts to normalize regional relations with Israel may generate tensions, given public support for the Palestinian cause.
Türkiye Facing Geopolitical and Economic Balancing Act
Türkiye is expected to continue its geopolitical balancing strategy in 2025. This strategy involves managing relationships with Western allies and emerging economic partners such as BRICS. The government will likely focus on stabilizing its currency, reducing inflation, and managing external debt repayments. However, fiscal policies could impact public spending and economic stability.
Egypt’s Economic and Security Challenges
Egypt faces considerable economic and security challenges. Military dominance influences economic reforms, while regional geopolitical instability adds to the pressures. Fiscal consolidation, external debt burdens, and persistent inflation remain key concerns. Although international financial institutions provide temporary support, long-term solutions are still needed. Geopolitical realignments in the Horn of Africa could also test Egypt’s diplomatic and economic strategies.
