American International Underwriters (AIU) is offering Asia's first political risk insurance. It offers coverage of up to US$150 million for losses caused by changes of government, riots, or the imposition of capital controls. AIU Southeast Asia political risks regional manager Daniel Wagner said demand for this class of insurance had increased substantially after investors had their fingers burnt when the Asian turmoil struck late in 1997. Demand for political risk cover was also expected to increase with the mainland's expected entry into the World Trade Organisation this year. AIU's policies will cover: Currency inconvertibility: Losses from a government's sudden implementation of capital controls Nationalisation: Government seizure of private assets without adequate compensation Political violence: Physical damage and business interruptions caused by riots, terrorist attacks, or war Contract frustration: A buyer's failure to pay because of war Mr Wagner said the insurance would be of great benefit in situations such as Malaysia's implementation of capital controls in 1998, when foreign investors who had invested in the stock market could not get their money out of the country and incurred losses.