Demand for political risk insurance has surged by 33% as businesses grapple with increased geopolitical and macroeconomic volatility, according to Howden’s 2025 Credit and Political Risk Insurance (CPRI) report.
Titled “Opportunity in Flux,” the report highlights that this sharp increase in demand comes at a time when the broader insurance cycle is softening. This environment is opening doors for new market entrants and expansion into emerging asset classes and geographies, presenting fresh opportunities within business insurance coverage.
Howden’s analysis underscores the resilience of the CPRI sector, which has maintained robust underwriting performance despite recent global shocks such as the COVID-19 pandemic, regional conflicts, and economic disruptions. A significant component, trade credit insurance, has recorded steady annual profits over the past decade, with an average net combined ratio of 78%.
The report identifies 2025 as a pivotal year for trade and security, driven by geopolitical shifts, supply chain realignments, and financial market uncertainty—factors fueling heightened demand for trustworthy insurance solutions. Armed conflict is highlighted as the top global risk this year, nearly doubling the threat posed by extreme weather events, based on insights from the World Economic Forum and Howden.
Currently, the CPRI and surety market boasts a premium base of $49 billion spread across six product segments, outpacing growth in many other specialty insurance lines. Notably, non-payment insurance (NPI) is rapidly expanding in advanced economies.
Howden emphasizes that this evolving landscape offers significant opportunities for Indian companies, banks, and public sector institutions. With global trade undergoing realignment, CPRI can play a critical role in helping Indian businesses mitigate risks, access high-return ventures, and reduce the cost of capital by safeguarding investments.
Despite increasing demand, the market faces supply constraints, particularly in less developed regions. This imbalance is largely due to the complexity of insurance products and conservative risk appetites among many (re)insurers. Howden views these challenges as growth opportunities for innovation and new entrants, including Indian players seeking to expand their footprint in business insurance coverage.
Related topic:
Innovative Insurance Models Aim to Close the Gender Protection Gap
Generali Hong Kong CEO Cecilia Chang Named ‘Best Woman CEO – Insurance’ at Women’s Tabloid Awards
AM Best Maintains Stable Outlook for Japan’s Non-Life Insurance Sector Amid Structural Improvements
