Political risk reinsurance pricing - a methodology proposal

Following the recent political events which occurred in different countries (e.g. Arab spring started in 2010), the Political Risk Insurance (and Reinsurance) market continues to grow rapidly. However, when looking at the available scientific literature related to the pricing of such products, it is striking to see that very few models have been developed and proposed. The aim of this paper is therefore to propose a methodological approach for the pricing of Single Risks - Political Risk Insurance and Reinsurance - which can be easily implemented in standard IT tools.