Managing war-related risks in international trade: Innovative insurance products

Lyubov Klapkiv and Faruk Ülgen ()
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Lyubov Klapkiv: UMCS - Maria Curie-Sklodowska University
Faruk Ülgen: CREG - Centre de recherche en économie de Grenoble - UGA - Université Grenoble Alpes

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Abstract: To date, geopolitical tensions, mainly generated by military conflicts as well as by oppositions between some countries in the reconfiguration of the distribution of global economic and political powers, are contributing to increased uncertainty in international trade relations. These uncertainties are particularly linked to business counterparties located in countries/regions suffering from military conflicts. Trade operations with such counterparties are burdened with a range of risks that have a war-related nature. On one side, the counterparties from countries that participate in the war actions should manage the risks of physical damages, limitations or even lack of financial resources or labor force, bankruptcy, and so forth. On the other side, along with the growing risks, related to instabilities in international trade, foreign companies may find a niche in the high-risk market thanks to the need to manage war-related risks. The main purpose of this chapter is to study, from a historical perspective, the insurance mechanisms that could allow companies to transfer some war-related risks of trade operations to the insurers or special public institutions that would provide the insurance service to permit the smooth working of international markets in times of huge geopolitical conflicts.

Keywords: insurance product; innovation; war-related risk; insurance mechanisms (search for similar items in EconPapers)
Date: 2025
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Published in Ülgen, Faruk; Klapkiv, Lyubov. Innovation in Capitalist Economies: Crises, Challenges and Opportunities, 1, Routledge, pp.139-153, 2025, 978-1-032-90459-7. ⟨10.4324/9781003558187-10⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05042087

DOI: 10.4324/9781003558187-10

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