Political risks both at home and abroad should come under more consideration from businesses as they continue to grow and evolve.
Mark Oatway, head of corporate broking at Arthur J.
Gallagher, said that while political risk may not be on the radar for many businesses, risks are increasing around the world and should be monitored accordingly.
“We’ve been hearing a lot about Trump and Brexit in the news at the moment, but there is also a lot happening here in Australia – ranging from tax changes that have been recently implemented or remain in discussion, the recent back-flip on the emergency services levy in NSW and the heated debate surrounding stability of power supply to name but a few,” Oatway said.
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Oatway noted that brokers play an important role in helping clients understand their political risk exposure as the often complex risk needs precise consultation.
With global reports, such as the
Allianz Risk Barometer placing global economic developments as the fifth most critical risk for Australia businesses, staying updated on developments both at home and abroad is important for businesses as they may need to adjust strategy or operations based on changes.
“There is also the risk associated with disruption to, or loss of, supply, including the supply of finance and/or credit,” Oatway continued.
While some may view political risk as a worry for international and multinational businesses, risks persist throughout the economic spectrum. For larger businesses it is increasingly important as compensation for losses related to political risk events can vary depending on geographic location, with losses in less developed countries sometimes remaining unpaid.
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