Produce an implementable business plan for launching an entity (as early as October 2007) that would offer two specific types of political risk insurance, trade and business interruption, for Palestinian businesses (the 'PRI Company'). This will be done through funding a Project Director to drive the development of the business plan for the PRI Company under the oversight of a Steering Committee, led by a chief executive team, and comprised of partner organizations and individuals (summary sheet available) with requisite expertise.
Over the next twelve months, the Project Director will work to a) define the final insurance product offering, financial analysis and marketing plan for the PRI Company; b) develop the legal, ownership and employee structure of the PRI company, and a 3-5 year revenue and expense plan for it; 3) assess initial and 3-5 year capital needs and develop a funding plan for access to the capital for the PRI Company; and 4) develop a time schedule for the establishment, capitalization and launching of the PRI company. The goal of this 2006 commitment will be to evaluate and confirm the feasibility of the project, which if confirmed, will result in the presentation of the PRI Company as a commitment opportunity (the launch of the PRI Company) for CGI at the next annual meeting, September 2007.
Last year, the Center for American Progress and Fried Frank, joined by individuals from Marsh McLennan, Aon, Circle Financial Group, International Capital Strategies, International Center for Peace and Economic Cooperation in the Middle East, and Portland Trust, committed at CGI to conduct the initial market research to determine whether there was a business need for, parties capable of offering, and potential to design of a terrorism insurance product that if available would allow companies to take advantage of commercially attractive investment opportunities in the Gaza Strip/West Bank while minimizing the threat of specified political risks unique to the region. (Currently available traditional political risk insurance products did not adequately address the unique needs of foreign investors in this region.) The team's market research over the last year confirmed that there is a business need to insure two particular types of political risks (rather than terrorism risk): 1) investment risks for investors in business in the region and 2) trade risks for business interruption due to border closures/delays. It also identified that existing products offered did not meet these business needs and/or had structures which created marketing challenges so significant that the products were not accessible. Finally, it established that this product would require the formation of an independent entity to develop and manage the types of products that were required by the market. Therefore, the team concluded that the next step would be, through a 2006 CGI Commitment, to develop a precise business plan for such an entity to confirm its feasibility and its capacity to attract financing.
Jobs and economic opportunity are critical to establishing stability and security for Palestinians, a better future for the peoples of the region, and a more secure world. Small and medium size Palestinian businesses continue to survive, as they have through past difficult periods. This presents an opportunity for a political risk insurance product, and other similar economic tools that could remove obstacles to trade and investment, increase the likelihood of Palestinian business transactions, grow the number and nature of private sector job opportunities and strength of the Palestinian economy, and develop new methods to help resolve conflict by creating innovative products that stimulate conflict-torn economies.
This new commitment (1) creates a collaborative cross-border international team which, through working together, will broaden personal and business relationships; (2) facilitates the joint creation of a product which, in discussions with the established Political Risk team, Palestinian business leaders identified as a significant need; and will, if successful, create a product that (3) aims to enhance and reinforce the achievement of the regional stability by fostering greater on the ground business development; and 4) serves as a template for creating similar product offerings in additional countries where a need is identified.