Chapter 7

Investment Insurance

International business, including exports and direct investments, involves substantial commercial and political risk. The focus of this chapter is on insurance products that support foreign direct investment (FDI). Trade-related risk-mitigation products are covered in chapter 5. In order to facilitate third-party equity and debt for investments in emerging markets, Washington-based agencies offer a variety of risk mitigation products. Insurance products cover equity and debt investments on a conditional basis against various types of risks up to 100% in some cases. Typically, however, insurance products involve a deductible, or self-insurance requirement, which is in the 5%–10% range. The exact conditions under ...

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