Insurer appetite for political risk is strong and available insurance capacity has never been better, broker Marsh says in its annual Political Risk Map report.

Amid dynamic geopolitical conditions and economic uncertainty, the Political Risk Insurance (PRI) market has developed considerable depth in recent years, the report says. Businesses can find potential solutions to various aspects of political risk with PRI, as well as political violence and terrorism coverage and kidnap and ransom insurance.

In 2020, Marsh predicts escalating trade tensions will continue and will result in political and economic uncertainty.

“Businesses operating in both developed and emerging markets face a complex and often volatile political risk landscape in 2020,” Marsh says.

The Covid-19 outbreak may disrupt trade and supply chains, and trade tensions continue to present the major risk to the global economy as these disputes could cost the global economy US$700 billion ($1.07 billion) in lost output this year, the report says.

“A move away from multilateralism and global cooperation means that governments may be unwilling to form a coordinated response to a global economic crisis, while there is reduced scope for monetary and fiscal stimulus,” Marsh says.

Sino-American rivalry will deepen in 2020 it says, and the tech industry is expected to emerge as a particular battleground for the two countries. Economies globally will increasingly have to choose between US and Chinese technology partners.

Tense US-Iran relations and tensions between Russia and the west are also expected to continue this year.

“The US-Iran relationship is unlikely to improve and will generate instability in the region,” the report says.

In Europe, the UK’s future relationship with the European Union, from economic to political to security, will take years to address, Marsh says.