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Political risk tops companies' ERM risk registers, according to latest Willis Political Risk Survey

1. 75% of global firms cite political risks in top five risks. 2. 58% expect financial impacts due to U.S. tariffs. 3. 2023 recorded highest political risk losses in eight years. 4. Companies adopting diversification and insurance for risk mitigation. 5. Political risk concerns are now widespread, not sector-specific.

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Why Bullish?

While political risks may threaten certain industries, WTW is positioned as a provider of essential risk management solutions. Past market responses indicate that companies providing risk solutions often see demand rise during times of heightened uncertainty.

How important is it?

The article emphasizes the growing concern and demand for political risk solutions, which aligns with WTW's offerings. This relevance positions WTW favorably within a landscape of rising risks, indicating potential for increased business.

Why Long Term?

Political risks are persistent, creating a sustained need for risk management solutions over time. Historical patterns show that firms with robust risk strategies can navigate long-term disruptions more effectively.

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LONDON, May 01, 2025 (GLOBE NEWSWIRE) -- Political risks rank among the top five risks on the Enterprise Risk Management (ERM) risk register for 75% of global companies, with 11% identifying it as the number one risk. Highly exposed industries, such as contracting, transport and mining are disproportionately affected, according to the eighth annual Political Risk Survey and Report by Willis, a WTW business, (NASDAQ:WTW). The survey revealed that 58% of respondents anticipated a negative financial impact on their organization due to the imposition of tariffs by the US. This figure is nearly as high as the 60% who reported financial setbacks from the Russia – Ukraine conflict in 2023 and significantly exceeds the 28% who cited negative effects from Western tensions with China and the Middle East conflict. Other key findings were: Over the past eight years since the survey began, 2023 saw the highest political risk losses, driven by expropriation, political violence and currency convertibility issues. Notably, 18% of respondents faced losses significant enough to require corporate earnings restatements. Companies were most likely to rely on direct negotiations with host governments and political risk insurance to recover such prior losses. In 2025, the most common risk mitigation strategies against potential future losses were diversification and a "three lines of defense" approachTop political risk concerns for 2025 included U.S. policy uncertainty (especially tariffs) and tensions between the U.S. and its allies.Other major risks included restricted access to key markets due to geopolitical tensions and the threat of state-backed cyber and disinformation attacks. The research includes a survey of 66 companies and in-depth, anonymized interviews with 15 companies.  “In the eight years since we began this research, companies’ political risk concerns have changed almost unrecognizably,” said Sam Wilkin, Director of Political Risk Analytics at Willis. “In 2018, political risk was mostly a worry for highly exposed sectors investing in risky countries like Venezuela. Today, political risk concerns apply across sectors, involve a much higher level of potential loss, and are focused on United States policy.” The complete report can be downloaded here. About WTW At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance. Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. Learn more at wtwco.com. Media Contacts Sarah BookerSarah.booker@wtwco.com / +44 (0)7917 722040

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