Recent developments in the Middle East have led insurers to take a closer look at political violence and war risk across the region. For organisations with operations, assets or supply chains connected to the Gulf, this has created a more fluid environment for insurance discussions.
Political violence cover exists to support organisations through periods of uncertainty. While uncertainty itself is not new, the pace at which market conditions are evolving has increased, making early awareness and timely conversations more helpful than usual.
What has changed
In the period leading up to the current escalation, the political violence market had become more competitive. Additional capacity entered the market, improving choice and pricing for many organisations.
More recently, insurers have been taking a more cautious view as events continue to unfold across the region. While the purpose and intent of political violence cover remain unchanged, the way the market responds to changing conditions has adjusted. This can influence how much capacity is available at any given time and how coverage is priced. This shift reflects a natural market response to uncertainty.
What this means in practice
Political violence and war insurance is supported by finite capacity that is shared across regions. As conditions evolve, the market adjusts accordingly.
For clients, this is being felt mainly through availability and pricing, rather than through changes to policy wording or scope. Coverage structures and definitions remain broadly consistent, but the cost of cover and the amount of capacity available is shifting as the situation in the region continues to develop.
Organisations that begin discussions earlier typically have more flexibility to explore available options and shape coverage in line with their needs. Where discussions take place later, options may be narrower simply because market conditions have continued to evolve in the meantime.
It is also normal, in a faster moving environment, for pricing discussed early to change before a decision is taken. This reflects market movement and reinforces the value of timely planning.
Industry considerations
The market is currently taking a differentiated view across industries, reflecting how future events could affect different types of business.
Energy related organisations, particularly oil and gas, are experiencing a more selective environment due to their strategic importance and proximity to potential disruption.
Infrastructure, logistics, ports and aviation are also receiving closer attention, especially where assets are location specific.
Commercial, hospitality and light industrial organisations generally continue to have broader access to capacity, although pricing and limits vary by country and can adjust as conditions change.
Again, early discussion can help ensure that internal approval timelines remain aligned with evolving market conditions.
Next steps
For organisations with exposure to the Gulf, it is recommended, that they review their political violence and war insurance position. For some, this may simply involve confirming that existing arrangements remain appropriate. For others, an initial discussion can help clarify what options are available and how the market is currently responding.
Lockton’s political violence specialists continue to support clients across the region with measured, practical guidance as conditions evolve. We are available to help organisations review their position in a considered way and ensure coverage decisions remain aligned with business objectives and risk appetite.