Political risk capacity defies Ukraine war, ekes out H1 gain: Gallagher

Capacity for political risks and structured credit insurance has held up against the war in Ukraine and a rise in political risks, macroeconomic uncertainties and market volatility, analysts at global re/insurance broker  Gallagher have claimed.

"Despite the increasingly uncertain risk environment, we have been encouraged to see market capacity grow across the four risks areas we track," authors wrote.

Total capacity across political project risks, political/sovereign trade risks, commercial trade risks, and non-trade have grown 0.7% over the past six months since before Russia launched its invasion of Ukraine.

There's been a lot to overcome. The Russian invasion of Ukraine spreads spill-over fears across the globe. Supply chains continue to fall victim to the war as well as to lingering Chinese lockdowns.

Across the globe, the election schedule is packed and everywhere you turn, investors could see "policy shifts and/or deadlock contributing to increased uncertainty in the political landscape." Constituents are suffering covid fatigue, cost of living crisis and economic fears.

The fractional 0.7% growth represents a slowdown from a market that had been considerably hotter in the prior period. The 12 month rolling growth rate is pulled down to 7.0%.

Growth has been tipped towards non-trade insurance capacity, up 1.2% over the past six months, ahead of 0.9% growth for political project and political trade risks.

A review of preliminary figures (not updated for prior periods), shows capacity growth stronger for the corporate market than for Lloyd's names across all four segments.

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