Gallagher has released its latest Structured Credit and Political Risk (SCPR) Insurance Market Report, providing an overview of market capacity, recent developments, and country-specific risk assessments in collaboration with Pangea-Risk.
The report outlines the role of SCPR insurance in managing risk amid geopolitical and economic shifts and highlights the continued expansion of market capacity, with insurers offering coverage for long-term risks at an increasing scale.
The report notes that geopolitical instability, particularly in the Middle East and Africa, and shifts in economic and foreign policy following the second inauguration of Donald Trump, will influence trade and investment dynamics.
The report estimates that market capacity for political risks and contract frustration now stands at approximately US$3.5 billion per risk, reflecting an increase in underwriting capability.
In the previous year, Gallagher pointed to geopolitical tensions, including ongoing conflicts in Ukraine and the Middle East, as drivers that will continue to impact global markets. With the Russian invasion of Ukraine still ongoing and the Middle East still experiencing tensions, there are still impacts from both events that are expected to be felt in the market.
The market capacity update for January 2025 indicates an increase in underwriting capacity across various SCPR segments. Political Risk capacity is now estimated at US$3.45 billion, up from US$3.35 billion in mid-2024.
Contract frustration risks are supported by a capacity of US$3.57 billion, while commercial risk capacity has risen to US$2.99 billion. Non-trade risks are covered by US$2.46 billion in market capacity, reflecting overall growth in the sector. The report attributes this expansion to increased insurer participation and rising demand for structured credit and political risk coverage.
In the Democratic Republic of the Congo (DRC), ongoing insurgent violence continues to impact the country’s political, security, and economic outlook. The M23 insurgent group launched a major offensive in early 2025, capturing the provincial capitals of North Kivu and South Kivu, along with their airports.
In Ivory Coast, risks related to political violence and civil unrest are expected to rise ahead of the October 2025 presidential election. President Alassane Ouattara has indicated a possible bid for a fourth term, which is likely to face opposition. The report notes that this scenario could lead to pre- and post-election unrest.
Saudi Arabia’s economic outlook in 2025 will be shaped by lower interest rates, increased oil production, and large-scale domestic investment tied to Vision 2030. Public sector spending on infrastructure projects such as Neom and Diriyah Gate is expected to support private sector expansion.
The report also suggests that political shifts in Syria following the collapse of President Bashar al-Assad’s government could reduce Iranian influence, potentially opening up economic opportunities for Saudi Arabia. Domestically, efforts to normalize regional relations with Israel may create tensions, given public support for the Palestinian cause.
Türkiye is expected to continue pursuing a geopolitical balancing strategy, managing relations with Western allies and emerging economic partners such as BRICS. The government is expected to focus on stabilising the currency, reducing inflation, and managing external debt repayments, but fiscal policies could impact public spending and economic stability.
Egypt faces economic and security challenges, with military dominance impacting economic reforms and geopolitical instability in the region creating additional pressures. Fiscal consolidation, external debt burdens, and persistent inflation remain key concerns despite temporary support from international financial institutions.
The report also highlights geopolitical realignments in the Horn of Africa, which could test Egypt’s diplomatic and economic strategies.
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