Political Risk Outlook 2026: Insurers Brace for Arctic, Middle East, and Indo-Pacific Tensions

Political and geopolitical risk is moving higher on insurer watchlists as territorial disputes, regime changes, and global power competition intensify, according to Yoel Sano, Head of Global Political and Security Risk at BMI. Speaking at a London industry event hosted by Fitch, Sano outlined a 2026 outlook that points to persistent instability across multiple regions with direct implications for underwriting and claims.

One immediate area of concern is the Arctic Circle, where competition over shipping routes, air corridors, and critical minerals is intensifying among the United States, Russia, and China. Recent tensions surrounding Greenland’s sovereignty underscore how territorial disputes can quickly escalate into diplomatic or economic confrontations. For claims teams handling marine, energy, or political risk losses, the Arctic represents growing exposure tied to sanctions risk, disrupted logistics, and state-backed interference.

Regime change remains another key driver of uncertainty. Venezuela’s sudden leadership upheaval has created short-term instability around oil production, governance, and future elections. Insurers with exposure to energy assets, infrastructure, or trade credit in the region face elevated risks tied to expropriation, contract frustration, and civil unrest. Similar political shifts across Latin America, where upcoming elections may further realign governments toward the US, could alter regulatory and operating environments relevant to multinational insureds.

Major geopolitical flashpoints continue to challenge insurers globally. Tensions around Taiwan following expanded US arms support, ongoing conflict in Ukraine, and unresolved instability across the Middle East all raise the prospect of loss accumulation from war exclusions, terrorism definitions, and contingent business interruption. Claims adjusters should expect heightened scrutiny of policy language, causation analysis, and aggregation management, particularly if ceasefires fail or conflicts expand.

Longer-term risks add another layer of complexity. The possible expiration of the New START nuclear treaty, nuclear expansion by China and North Korea, and the militarisation of space increase tail-risk scenarios that could affect aviation, satellite, cyber, and specialty markets. At the same time, US-China competition over artificial intelligence and critical materials is forcing countries and companies to align with competing technology systems, creating new operational and compliance risks that may surface in future claims.

For insurers and claims professionals, Sano’s outlook reinforces the need for close coordination between underwriting, claims, and risk management teams. Political risk is no longer confined to niche products. It is increasingly embedded across mainstream insurance lines, requiring adjusters to stay alert to geopolitical developments that can rapidly turn into complex, multi-jurisdictional claims.