Clyde & Co Survey Shows Rapid Escalation of AI and Geopolitical Risks for Insurers

Global law firm Clyde & Co has published survey findings highlighting a rapid escalation in two of the most significant risk categories facing the insurance industry: artificial intelligence and geopolitical instability. The research, surfaced in industry coverage in late June 2026, captures an industry confronting an environment in which risks are not only intensifying individually but increasingly overlapping and compounding one another.

The escalation of AI-related risk reflects the technology's rapid and uneven adoption across the insurance value chain — from underwriting and claims processing to fraud detection and customer service. As insurers deploy AI more deeply, they face new and partly unquantified exposures: questions of liability when automated systems make erroneous decisions, the use of AI by malicious actors to enhance the sophistication of cyberattacks, and the regulatory uncertainty surrounding explainability and accountability. These concerns echo findings from other recent industry research, including a GlobalData poll in which nearly a quarter of insurance professionals said AI was not yet ready for widespread use, and regulatory responses such as India's IRDAI establishing an AI governance working group.

The geopolitical dimension has become acutely visible in 2026. The Middle East conflict — centered on the Strait of Hormuz crisis — has tested the global insurance and reinsurance market across multiple lines simultaneously, including marine, energy, aviation, and political risk. War-risk premiums surged dramatically, insurers withdrew coverage, and governments stepped in as insurers of last resort. The Bank of England's Financial Policy Committee and other authorities have noted that risks associated with geopolitical tensions, trade fragmentation, and sovereign debt pressures remain elevated and could materially affect open economies and global financial centers.

The Clyde & Co findings sit within a broader pattern of industry research — including the Triple-I/Munich Re RiskScan 2026 study — pointing to a risk landscape increasingly defined by interconnected rather than isolated threats. For insurers, the practical implication is that traditional actuarial models built on historical, uncorrelated loss patterns are being stress-tested by correlated, systemic, and rapidly evolving exposures. Carriers are responding by tightening policy language (particularly around cyber and AI), reassessing aggregation and concentration risk, and rethinking how they underwrite and price exposures in an environment of structural volatility. The survey underscores that risk management and underwriting expertise — and the ability to adapt models quickly — have become defining competitive capabilities in the current market.