The fast-moving events that have ousted long-standing dictators in both Tunisia and Egypt are a wake-up call to global companies that they may not have been paying sufficient attention to yet another kind of risk—this time, political.
“I wouldn’t say that it’s a matter of companies having ignored political risk,” says Roger Schwartz, national political lead at Aon Crisis Management. Companies have just been self-insuring themselves on political risk, he adds. “I think that after Tunisia and Egypt, they may be reassessing their exposure and reassessing that approach.”
This is particularly true for American companies, Schwartz says. “As a rule, European companies have been more proactive about insuring against political risk. American firms have tended to take a more roll-of-the-dice attitude of dealing with things when they happen.”