Product Family


Global Chief Underwriting Officer, Political Risk, Credit & Bond

To say that 2020 was a difficult year is a huge understatement. The impact of the global pandemic continues to be felt in developed and emerging markets. As nations grapple with policies and programs intended to facilitate recovery and growth, it is important to acknowledge that risks still permeate alongside investment opportunities.

If there has been a silver lining to the dark clouds of COVID-19, it may be that the worldwide response to the pandemic for a time tempered geopolitical tensions. As vaccines roll out, markets begin to safely recover, and businesses can re-emerge from government restrictions, although these tensions are likely to reappear. The risk of conflict and political violence is still strong in some regions.

With a change in the U.S. presidential administration, an ambitious economic agenda, and increasing market optimism about bringing COVID-19 under control, the stage is set for a dramatic upsurge in economic recovery in 2021. AXA XL foresees growth opportunities in several areas, including:

  • Travel and tourism. After the pandemic lockdowns during 2020, there is pent-up demand for travel and tourism services. Airlines and the hospitality sector were devastated by COVID-19, and many emerging market economies are highly dependent on tourism. The International Air Transport Association estimated that 2020 would enter history as the worst year ever financially for aviation.
  • Trade agreements. The new U.S. administration is clear about reversing protectionist approaches and is making efforts to reconnect with allies and multilateral agencies. Internationally, other trade pacts offer hope for accelerating the flow of goods and services, which in turn will drive economic recovery.
  • Investments in infrastructure. Worldwide, there is a tremendous need for infrastructure replacement and development—especially in the renewable energy space. Infrastructure is a priority in the new administration’s economic agenda, and the United States can play a leadership role in this sector through public/private partnerships to manage credit risks.
  • Investments in health care. A risk that the pandemic exposed is the need to strengthen health care systems in developed and emerging markets. With the challenges of delivering care to patients with acute conditions, to distributing COVID-19 vaccines, there are numerous opportunities for public and private investments in the health care sector. Health care is a growth opportunity in many regions, and particularly in Africa.

Another development that will undoubtedly assist the global recovery is a significant shift by multilateral agencies, such as the International Finance Corporation (IFC) and development banks, to focus on emerging economies. Two strategic pillars of the IFC, for example, are to create markets and to mobilize private capital for development projects in low-income countries.

A key initiative in facilitating private investment is the IFC’s Managed Co-Lending Portfolio Program (MCPP). The MCPP enables institutional investors to create loan portfolios that reflect those of the IFC and generate investment-grade risks and returns. Access to debt financing is especially important to smaller enterprises in emerging markets, where infrastructure needs are great. AXA Group, the parent of AXA XL, is a proud supporter of the IFC as our Group Chairman noted, and AXA XL is proud to provide coinsurance to backstop the MCPP loan facility.

Numerous agencies, from the World Bank to the European Bank for Reconstruction and Development, to the U.S. EXIM Bank, among others, created or enhance programs to aid economic recovery due to COVID-19. These programs are a good start, but the need for public/private partnerships to support economic growth is ongoing.

Now is the ideal time to consider the risks and opportunities in global investments. Political risk and credit insurance as well as commercial surety bonds offer proven ways of mitigating and managing risks in projects that can provide long-term benefits for all.

About the Author
Daniel Riordan is Global Chief Underwriting Officer of Political Risk, Credit & Bond at AXA XL. Before joining the AXA XL, he held various senior executive roles in political risk, specialty and global corporate property and casualty insurance at a leading global insurer. He has had a long association with the Berne Union, an international association of export credit insurance organizations, serving as president from 2013 to 2015.

To contact the author of this story, please complete the below form

Invalid First Name
Invalid Last Name
Country is required
Invalid email
Invalid Captcha

Global Asset Protection Services, LLC, and its affiliates (“AXA XL Risk Consulting”) provides risk assessment reports and other loss prevention services, as requested. In this respect, our property loss prevention publications, services, and surveys do not address life safety or third party liability issues. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. The provision of any service does not imply that every possible hazard has been identified at a facility or that no other hazards exist. AXA XL Risk Consulting does not assume, and shall have no liability for the control, correction, continuation or modification of any existing conditions or operations. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any document or other communication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, AXA XL Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with our services, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.

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.