Political Risk Insurance (PRI) provides a financial solution to illegal or unwarranted government intervention. Buyers of PRI include Contractors, Commodity Traders, Corporate Investors and Banks (financing contracts, projects or assets) operating in emerging markets. The product can be divided into two broad categories - coverage for Trade Risk and coverage for Investment Risk.

In terms of Trade Risk PRI provides cover for clients that are entering into trade and service contracts. The chief risk is Contract Frustration, whether by a public buyer who refuses to pay (including the non honouring of a state guarantee) or the inability of either party to carry out their part of the contract as a result of political events (for example embargo, license cancellation or war). Cover is also available for the Wrongful Calling of on-demand guarantees, either by a public buyer or by a private buyer as a result of political events. PRI for Investors mitigates the uncertainty of investing in a country for both equity holders and lenders. Coverage includes Confiscation, Expropriation and Nationalisation which protects the investment from action by the host goverent. Coverage can be extended to include perils such as Currency Inconvertibility, abrogation by the Government on a signed concession or agreement, War and Political Violence. AIG has been underwriting political risk since the 1970's and has the market's longest continuing political risk reinsurance treaty. During this period the company has paid over S431 million in claims to its clients. AIG can offer cover of up to S85 million for any single risk with a maximum policy period of up to 15 years and is rated AA+ by S&P. AIG Political Risks thus offers experience, financial strength and the ability to provide wide ranging, long term, large scale financial solutions for clients operating in emerging markets. AIG also has a strong presence in Uzbekistan through Uzbekinvest International Insurance Company (UIIC). UIIC is a joint venture between Uzbekinvest, the state insurance provider (80%) and AIG (20%). The joint venture has helped to promote trade and investment into Uzbekistan providing clients with risk-mitigation from professional insurers at previously unavailable levels. Written by Oybek Khalilov, Vice President, UzAIG and Vice President, American Chamber of Commerce in Uzbekistan.

Writen by Oybek Khalilov, Vice President UzAIG and Vice President, American Chamber of Commerce in Uzbekistan.