Political risk insurance to surge amid rising geopolitical tensions, says GlobalData

Escalating conflict between the US, Israel, and Iran is increasing risk exposure across the Middle East, placing assets such as hotels, data centres, and pipelines in potential danger and driving demand for specialist insurance cover.

According to GlobalData, geopolitical instability is expected to trigger a sharp rise in political risk insurance uptake. While cyber insurance demand has surged since the Russia–Ukraine war, recent polling indicates political risk cover is gaining ground at a similar pace.

Missile strikes have already impacted locations including the Fairmont The Palm hotel in Dubai, highlighting the growing threat to commercial property across the area between Israel and Iran. A GlobalData poll conducted in late 2025 found that while most respondents expected cyber insurance to see the highest demand, one in four anticipated significant growth in political risk cover. Supply chain insurance is also likely to benefit amid disruption to key shipping routes.

Ben Carey-Evans, Senior Insurance Analyst at GlobalData, said: “Political risk insurance is important to businesses near potentially dangerous zones, as most insurance policies have war exclusions. This means that if a hotel, for example, is damaged by any kind of military strike, a traditional commercial property or business interruption policy may not pay out.”

He added that demand would surge throughout 2026, though insurers faced “significant risk” requiring careful pricing and underwriting discipline.

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