Evan Freely has been insuring global risks for years—through the 2008 market meltdown, the 2002 crisis in Argentina, and the 1993 downturn in Venezuela.
Yet turmoil now seems to be coming at a more rapid pace than he's seen before. "I'm more concerned today about political risk than ever," says Freely, the global head of political risk and credit specialties at Marsh & McLennan Cos., the world's largest insurance broker.
Rising populism in France, Germany, Denmark, and Greece has turned up the dial on his company's barometer of turmoil in the region. That and other developments are pushing the market for political risk insurance toward $10 billion in 2018, up from $8.1 billion in 2015, according to a KPMG LLP report published last year. The consulting firm says demand has been spurred by companies looking for coverage against cyberattacks and terrorist events. KPMG reckons that cybersecurity insurance will be the fastest-growing segment of the market, increasing 20% a year from 2015 through 2018.
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