Political risks driven by governments’ economic policies continue to outweigh those stemming from international conflict, according to the ninth annual Political Risk Survey Report by Willis.

Despite the survey being issued as conflict in the Middle East broke out, respondents selected tariffs – rather than international violent conflict – as a top political risk. Sixty‑one per cent (61%) said the impacts of rising tariffs are the most difficult to manage, and the same proportion reported that their company had already suffered a negative financial impact from tariffs.

The findings underline a shift in demand towards insurance solutions that address economic policy shocks, supply chain disruption and "grey-zone" activity, and not only traditional war and political violence.

Tariffs and insurable losses drive interest in cover

The survey reported that the share of respondents experiencing credit and political risk insurable losses from geopolitical causes is the second highest in the nine-year history of the study.

For the third consecutive year, related losses exceeded US$250 million, and interest in political risk and trade credit insurance as tools to manage geopolitical risk has increased.

Broader market data point in the same direction. Industry analyses suggest the global political risk insurance market is growing steadily, while trade credit insurance premiums are expected to expand at a healthy pace this decade as insolvencies rise and economic uncertainty persists.

At the same time, recent market surveys indicated that capacity for pure political risk has flattened, with some insurers showing less appetite for very long‑tenor risks. That divergence suggests underwriters are more comfortable with shorter‑dated, credit‑related exposures than with long‑horizon sovereign risk where outcomes are harder to model.

Home‑government policy and fragmented global business

The Willis survey highlighted how domestic policy has itself become a material source of political risk. Thirty‑nine per cent (39%) of companies said they face higher risks because of the policy choices of their home government.

In response to an increasingly fragmented geopolitical landscape, 84% of respondents said they are either actively preparing for, or considering preparing for, a future in which “Eastern” and “Western” portions of their global business may need to be structurally independent. In practice, that could mean duplicated supply chains, ring‑fenced data and technology systems, or separate legal entities to comply with divergent sanctions, data and competition regimes.

Grey‑zone aggression and critical infrastructure

The report also underlined growing concern over “grey‑zone” aggression – hostile actions that fall below the threshold of open armed conflict.

Economic coercion or retaliation, including official or unofficial sanctions, threats or tariffs, and export embargoes on key commodities, was ranked as the greatest grey‑zone concern by 61% of firms, the second largest group of respondents.

Attacks on infrastructure, including cutting undersea cables, damaging pipelines, disrupting power stations or arson in warehouses, remain the top concern for 65% of respondents. These scenarios straddle multiple insurance classes, from property, energy and marine to cyber and business interruption, and can trigger difficult debates over war, terrorism and political risk exclusions.

Recent incidents involving suspected sabotage of subsea cables and energy infrastructure in Europe have heightened official concern about hybrid threats to critical infrastructure.

Supervisory focus on geopolitical risk

Global insurance supervisors have also started to flag geopolitical risk as a key macro‑prudential issue. Recent international reports highlight how geopolitical shocks can affect insurers through market volatility, operational disruption, higher claims and shifting lapse or surrender patterns.

That scrutiny is likely to increase expectations on insurers to demonstrate how they stress‑test portfolios against scenarios such as sanctions escalation, supply chain breakdowns, cyber‑enabled infrastructure events and sharp movements in sovereign and corporate credit.

"The political risk map of 2026 is not simply a map of war zones. It is a map of contested systems – trade systems, technology systems, information systems and domestic political systems," said Sam Wilkin, director of political risk analytics at Willis. "For globalised business, political risk is becoming less about exposure to a handful of unstable places, and more about exposure to an increasingly unstable world order. This report shines a light on what companies find hardest to manage in this geopolitical landscape that is changing so fundamentally.”

As exposures shift from discrete conflict zones to contested systems and grey‑zone tactics, the challenge will be to keep products, pricing and wordings aligned with a risk environment that is becoming more complex and less predictable.