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How important is COVID-19 as a factor in current political risk?

Analysing trends and patterns seen over the last quarter in the world’s most vulnerable countries

Credit, Political Risk and Terrorism|Financial, Executive and Professional Risks (FINEX)
COVID 19 Coronavirus

August 27, 2020

The Willis Towers Watson Political Risk Index – Summer 2020 offers insights into the impacts of COVID-19 on political risks by country, covering expropriation, political violence, terrorism, exchange transfer and trade sanctions, and sovereign default.
Willis Towers Watson at Airmic Fest
Willis Towers Watson at Airmic Fest

We have been learning, over the past few months, about the importance of COVID-19 as a factor in political risk. We now know a little more about the coronavirus itself and have some experience of the strain that it is putting on governments around the world – many of which, less than six months ago, were counting on an appreciable degree of economic growth in 2020. We are also beginning to discern the legacy of debt that the pandemic will leave behind as and when it finally departs.

The Willis Towers Watson Political Risk Index, in association with Oxford Analytica, is produced quarterly. It covers 40 countries and each is given an overall score derived from the ratings for five individual risk categories: expropriation, political violence, terrorism, exchange transfer and trade sanctions, and sovereign default. In the last edition, all 40 countries posted a rising risk in at least one of those categories, and 39 in more than one.

The word we used for the previous edition of the Index was ‘unprecedented’. This time, what we see across the five categories that is much closer to the traditional mix of rising, falling, and static risk. This is not to say that normality has been restored. But does it suggest that we are now beginning to see the outlines of individual responses to the crisis from each of the countries in the Index?

To read more on the political risk landscape, download the Political Risk Index – Summer 2020 report.

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Director of Political Risk Analytics, Financial Solutions

Based in Washington, DC, Sam Wilkin is responsible for developing and implementing political risk analysis and management tools and solutions for Willis Towers Watson clients globally.

Sam has more than twenty years of experience in political risk analysis and consulting. He the author, co-author or editor of four books on populism and political risk, and in 2017 and 2018 was a visiting fellow at the Watson Institute for International and Public Affairs at Brown University.


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