Howden has released its 2025 credit and political risk insurance (CPRI) report, which shows a 33% increase in demand for political risk insurance, driven by ongoing trade disruptions and global economic shocks.
According to the report, despite strong underwriting results and increased demand, overall growth in the CPRI market remains limited. Since 2019, the sector has expanded at less than half the rate of property and casualty lines and only a fifth of the growth seen in the cyber insurance market.
The credit and political risk sector, estimated to be worth US$50 billion, presents an opportunity to diversify its risk portfolio to better serve clients and contribute to economic activity.
Phil Bonner (pictured above), managing director of global specialty treaty at Howden Re, said 2025 had long been viewed as a milestone year and that it has already shown significant changes.
“We’re only six months in and the outlook is already radically different and highly uncertain as geopolitical and macroeconomic forces converge to reset decision-making around trade and security in an increasingly fractured world,” Bonner said.
Bonner emphasized that although news cycles may paint a negative picture, credit and political risk insurance plays a critical role in enabling investment and trade during volatile times. By protecting assets and lowering capital costs, the market provides a layer of certainty for businesses, lenders, and public agencies operating in unstable environments.
The CPRI market has seen notable developments in capacity and participation. A recent survey by WTW reported a 19% increase in deals sent to market in 2024, with brokers issuing over 15,000 communications to insurers requesting terms.
The number of insurers participating in the market has also grown, with 75 CPRI markets recorded in the latest survey, up from 67 the previous year. This expansion indicates a broader appetite among insurers to engage in the CPRI space, potentially offering clients more options and competitive terms.
Howden argues for expanding the reach of CPRI into new asset classes and markets, calling on existing carriers and potential entrants to consider how they can evolve to meet emerging needs.
Bonner noted that while some reinsurers maintain a long-term view and resist change, staying relevant may require adapting to client demand through innovation and the development of new products.
“What we have seen is that the capacity is there, but much of the capacity is holding growth, opportunity, and ultimately purchasing back,” Bonner said. “This capacity, if it wants to remain with the best performing, most capable underwriting teams, needs to be more imaginative when it comes to understanding what the client’s needs are.”
Multilateral institutions like the Multilateral Investment Guarantee Agency (MIGA) continue to play a significant role in supporting political risk insurance, especially in emerging markets.
MIGA provides guarantees to investors and lenders, protecting against non-commercial risks such as expropriation, currency inconvertibility, and breach of contract. These guarantees can help attract foreign direct investment by mitigating potential political risks, thereby facilitating economic development in host countries.
“Yes, risk is up in a highly fractured world, but providing protection to help clients trade and invest through such uncertainty is precisely why CPRI exists,” Bonner said. “Our market does this in a way no other can whilst achieving exceptional performance, as demonstrated by underwriting results that rival any other product line of insurance.”
With demand growing due to geopolitical instability, the market is being urged to respond with not only adequate capacity but also with flexible and responsive underwriting strategies.
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