War Overtakes Civil Unrest as Top Political Violence Exposure for Global Businesses

The risk landscape for political violence insurance has fundamentally shifted in 2026, with war displacing civil unrest as the top concern for globally operating businesses. This reordering reflects the dramatic impact of the ongoing Middle East conflict, which has forced insurers and reinsurers to reassess how they evaluate, price, and provide coverage for political violence and terrorism exposures across multiple lines of business.

The shift marks a notable change from recent years, when civil unrest — including riots, strikes, and protests that caused significant property damage in various global hotspots — dominated political violence loss experience and underwriting attention. The escalation of state-on-state conflict, particularly the US-Iran war and its regional spillover effects, has elevated war risk to the forefront of the political violence category, affecting everything from marine and energy coverage in the Gulf to property and business interruption exposures for multinational corporations operating in or near affected regions.

The reinsurance market's response has been characterised by industry broker Howden Re as 'selective rather than structural'. Major reinsurers have broadly maintained capacity and avoided imposing broad exclusions in response to the Middle East conflict, though executives have warned that second-order effects — including energy-driven inflation — could ultimately prove more damaging than direct war losses. Reinsurers have set aside hundreds of millions of dollars in reserves related to the conflict. At the same time, individual carriers are tightening their stance: Hiscox has informed brokers it will adopt a tougher approach on global war, political violence, and terrorism renewals due to the conflict.

The Norwegian Shipowners' Mutual War Risks Insurance Association is treating early March 2026 as the start date for potential blocking and trapping exposures within the Gulf, reflecting how the conflict has created novel coverage questions around vessels and cargo stranded by the disruption. For global businesses, the reordering of political violence exposures underscores the need to reassess their insurance programmes, understand the interplay between war exclusions and terrorism coverage, and prepare for a risk environment where geopolitical conflict — rather than localised unrest — is the dominant driver of potential losses. The episode reinforces a broader industry theme: in an era of compounding geopolitical risk, the boundaries of insurability are being actively tested.