POLITICAL RISK FACTORS IN SOUTH AFRICA: SOURCES, ANALYSIS AND INSURANCE FLEXIBILITY

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Abstract

Political risk factors are of prime importance to business operations around the world, as they may impact negatively on the financial performance thereof and may even lead to the financial failure of enterprises and industries. As political risk factors are often abundant in developing countries with emerging market economies, this study is undertaken in South Africa which is classified accordingly. The objective of this research focuses on the improvement of financial decision-making concerning the sources, analysis and insurance flexibility of political risk factors. To achieve the objective of the paper, a literature study and an empirical survey, involving the agents of political risk insurance in South Africa, were undertaken. Due attention is paid to identifying the most important sources of political risk factors, as well as the analysis of the political risk factors by the underwriters concerned. The importance of flexibility concerning the various aspects of political risk insurance is also addressed. The perceptions of the agents of political risk insurance in South Africa provide a valuable contribution to the empirical results and conclusions of this paper.

Keywords: Analysis of Political Risk Factors, Insurance Flexibility, Political Risk Factors, Political Risk Insurance, Sources of Political Risk Factors

How to cite this paper: Essel, R., & Mostert, F. J. (2013). Political risk factors in South Africa: Sources, analysis and insurance flexibility. Risk Governance and Control: Financial Markets & Institutions, 3(1), 34-41. https://doi.org/10.22495/rgcv3i1art4