"As the recession bites, the assets of companies operating and investing in emerging markets with fragile or fractured political systems could come under increasing threat of expropriation," Richard Ward, chief executive officer of Lloyd's said in the report's forward.

"The recession is not just increasing political risk in developing and emerging countries, growing civil unrest is a potential threat to businesses throughout the world including developed countries," he continued.

Mr. Ward added that one of the most prominent manifestations of political risk is increasing threats of piracy--particularly around the Horn of Africa--and also seen in Africa, Latin America and Asia.

Mr. Ward noted that, "with political instability heightening and the global political risk map likely to change, it is more important than ever that businesses undertake thorough risk assessments across all their global operations and investments and plan thoroughly for future potential instability."

According to the study:

o Continuing economic turmoil could have a significant impact on the levels of instability and political risk for global businesses, which could outlast the recession. Groups such as terrorists, disgruntled citizens, and hostile governments could put businesses at risk.

o Businesses should not be fooled if authorities in emerging markets appear more investor-friendly in the short-term. The risk of having properties seized will rise in proportion to the severity of the recession.

The report noted high asset prices have led some governments to renegotiate contracts--increasing their stakes--or seizing even projects. While the falling prices of commodities, such as oil and minerals, could encourage investor-friendly attitudes, any respite is likely to be short-lived.

o Countries need to continue to assess expropriation risks on a country-by-country basis. The history and culture of some Latin American countries could encourage more outright action by their governments. More indirect forms are likely in some African countries--where companies are likely to run the risk of repeated contract review and other forms of "creeping appropriation."

o Public protests seem unlikely to cause sustained disruption to business in developed or developing markets. They may, however, amplify existing tensions and give risk to more labor disputes.

o If current piracy levels continue over the next few years, companies could pay a growing "piracy tax" to maintain their global trading networks. Pirates could change their tactics and move into waters more difficult to police.

o The recession could cause piracy hotspots to resurface and kidnap tactics used on African seas could be copied in other areas. Southeast Asia, affected by the collapse of global trade, may see an increase in maritime theft. Armed robbery will continue to increase in Latin America, Lloyd's said in the report.