Zurich Financial Services is a Swiss firm that does business principally in Europe and North America. Zurich North America is a leading property/casualty firm with a large base of corporate customers. Their prominence in the business world has led them to introduce a line of ‘political risk services’ to Western businesses venturing into markets with unstable, or potentially unstable political environments.

It’s an interesting example of an insurer finding a niche and filling it – and what is also interesting is the language with which they couch the services they provide. Zurich North America “offers investors, financial institutions, project developers and contractors risk protection that can help control losses associated with political risk or events in emerging markets. Zurich’s Risk insurance coverage can help reduce the risk arising from expropriation, political violence, currency inconvertibility and other perils. In addition, each political risk insurance policy is customized to fit the requirements of each transaction.”

One man’s war zone is another man’s emerging market. This insurance is crafted to support business ventures in countries with shaky government regimes – more often than not, one suspects, dictatorships of one sort or another. Generally, businesses do not face expropriation of property, sudden ‘currency inconvertibility’ or violence in nations that have a history of electoral politics. That is speculation, but a business that turns sour because of a shift in political winds is usually tied to the fortunes of the party or parties in power.

Zurich would have you know that their services are available in over 70 “emerging markets.” It would be intriguing to learn how insurance policies are “customized to fit the requirements of each transaction” in these volatile political environments. Zurich’s careful phrasing leads one to suspect that, to cannibalize an old Maoist saying, “Emerging markets grow out of the barrel of a gun.” Halliburton has certainly found that to be the case.