Product Family


Vice President and Senior Underwriter, Global Political Risk, Credit and Bond Insurance, AXA XL

An interconnected world is good for trade and economic growth, but the sudden stoppage of payments can bring infrastructure projects, structured finance, and the wheels of commerce to a halt. Fortunately, two specialized forms of political risk and credit insurance have evolved to address the perils of non-payment.

One is contract frustration coverage, a political risk coverage that applies to losses resulting from non-payment of individual transactions by sovereign or non-sovereign public-sector payers, or obligors. The other form is credit insurance designed to cover losses from non-payment by private-sector obligors. Both forms have developed into valuable solutions that today are filling a gap left by changes in the banking industry after the global financial crisis.

Before the financial crisis in 2008, credit insurance was a successful but small portion of banks' portfolios. At that time, a more popular risk transfer instrument was credit default swaps, or CDS. The global financial crisis triggered by the unraveling of subprime loan portfolios made many investors and banks wary of CDS. This created demand for an alternative, and unlike credit default swaps, the credit insurance market performed well. Non-payment insurance began to fill the gap left when banks ceased offering CDS.

Over time, political risk and credit underwriters became more flexible and began to consider different asset classes. In the early days of credit insurance, most policies covered plain-vanilla transactions, such as letters of credit or deals directly linked to trade. As underwriters grew more comfortable, a significant innovation in non-payment insurance was its use in project financing, with long tenors of up to 20 years. As a result, new opportunities opened up and demand for this coverage has dramatically increased.

Product innovation continues

Innovation in non-payment insurance is continuing, particularly for credit risks, as a result of customers' changing needs. The insurance market is responding by bringing in new skills to assess credit risks. Increasingly, underwriters are decoupling non-payment insurance from trade transactions, enabling the product to address a much wider set of credit exposures.

For example, banks are looking to broaden the means of synthetic securitization to enhance the returns on pools of capital. In some instances, banks are issuing loans to private equity firms to support investment funds and limited partnerships. In addition, through secondary lending, an investment fund can introduce leverage to purchase additional assets. Insurance for the payment obligations in these non-trade transactions can give investors comfort and confidence to achieve their objectives.

The non-payment insurance marketplace is not homogeneous. The more than 60 underwriting organizations that operate in that space tend to focus on different types of business. Some prefer only to insure supply-chain exposures in which trade is a fundamental part of the deal structure, while others have a more expansive appetite for a broader array of transaction structures.

AXA XL has many years of experience in political risk and credit insurance. Our highly skilled underwriters, risk analysts and actuaries allow us to be entrepreneurial and creative in developing solutions. Non-payment risks are quite complex, and therefore our deep bench of talent with expertise in this space is important.

We take pride in the factors that differentiate our solutions. Among them are:

  • A data-driven approach that enables us to better understand what the customer wants to achieve and how it intends to address financial distress.
  • The ability to evaluate a submission and promptly deliver a decision on whether we can take on the risk.
  • A financial model we develop to check the data on the deal and inform underwriting decisions.

Our AA- rating from Standard & Poor's and our A+ financial strength rating from A.M. Best put AXA XL among a handful of companies that can provide customers with the highest level of capital relief. We're ready to put our expertise, creativity, and financial strength to work for the benefit of our customers. How can we help you?

For more information on Political Risk, Credit and Bond solutions, please visit

About the author
Stuart Barrowcliff is Vice President and Senior Underwriter for Global Political Risk, Credit & Bond Insurance at AXA XL. He joined XL Catlin, now part of AXA, in 2011. His career experience includes various executive roles with other insurance organizations and global financial institutions. He has an M.A. degree in international economics and Latin American studies.

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US- and Canada-Issued Insurance Policies

In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, coverages are underwritten by XL Specialty Insurance Company - Canadian Branch and AXA Insurance Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
US domiciled insurance policies can be written by the following AXA XL surplus lines insurers: XL Catlin Insurance Company UK Limited, Syndicates managed by Catlin Underwriting Agencies Limited and Indian Harbor Insurance Company. Enquires from US residents should be directed to a local insurance agent or broker permitted to write business in the relevant state.