Gerling NCM has reduced the political risk price for Kuwait. This is as a direct result of the end of the Iraq war, which has improved the country’s political risk environment.
Gerling NCM, however, has not reduced the political risk premium to the pre-war level, given the continued political instability in the region. There are a number of factors influencing this decision, including the possibility that Kuwaiti co-operation with the US against Iraq could further exacerbate existing rifts between the country's different political groups. In addition, there is a possibility that extremist Islamic cells could attack US military personnel in Kuwait.
Once a new regime has been established in Iraq, Gerling NCM will re-evaluate the political risk situation, and consider reducing the political risk price to pre-war levels.
Source: Business AM
