The Big Question: How do insurers navigate rising political violence and terrorism risks?

The growing threat of political violence and terrorism remains a major risk on the agendas of boardrooms across the world.

2024 was a year of unprecedented threats and insurer Allianz revealed businesses have for the third year running ranked political risks and violence as a top 10 global risk. It added civil unrest ranks as the biggest concern for more than 50% of company respondents globally, reflecting the fact that incidents are increasing and lasting for longer.

Not including ongoing social unrest in the Balkans and Turkey, there have been over 800 significant anti-government protests since 2017 in more than 150 countries, with more than 160 events in 2024 alone – 18% of protests lasting for more than three months. Following the “super election year” in 2024, policy changes by governments will continue to be trigger factors for protests and flashpoints in many countries in future, as could any economic hardships that result from tariff wars.

In addition, an increase in terrorist attacks from religious and political extremists – motivated by both far-right and left ideologies – is also a major concern for businesses over the year ahead.

Last month UK terrorism reinsurer of last resort Pool Re said: “Terrorism-related incidents throughout March 2025 have demonstrated the complexity of terrorism threat globally.”

Those concerns have seen a huge uptick in demand for political violence cover and the market is being tested as the threats show no sign of reducing.

Ian Summers, Global Business Leader, AdvantageGo.

Chloe Gordge, Head of War and Terrorism at Markel, says a ‘prudent approach’ to portfolio management and risk is critical for insurance carriers in 2025.

“Over the past 12 years, the political violence and terrorism (PVT) market has experienced a significant shift in rates, risks, and exclusionary language, after the emergence of several events that came with their own challenges and sent shockwaves across the globe,” she explains. “From the Manchester bombings to the Israel-Gaza conflict, have all contributed to the market’s volatility – forcing PVT carriers to re-evaluate their policy wordings for multiple territories.  

Having been with the insurer’s War and Terrorism team in London 12 years ago she adds despite the ramifications of past and present events, the ability to be flexible, adaptable and innovate are paramount skillsets for W&T underwriters, ensuring clients are fully supported as geopolitical tensions intensify, worldwide.

“As a leading terrorism insurer, Markel has underwritten through political turmoil in Thailand; fallout from political vacuums in the Middle East after the end of the US/UK involvement in Iraq and Afghanistan; ISIS-inspired lone wolf terrorist attacks across western Europe, as well as large civil unrest movements, which resulted in exponential property damage within the US, Chile, South Africa, Peru, Hong Kong, France and New Caledonia.” Gordge continues. 

She adds PVT risk demands a prudent approach.

“We are taking a more prudent approach to portfolio management, placing a heavier focus on ensuring rate adequacy and a forward-looking outlook to risk so we can continue providing tailored coverage for clients in higher-risk territories over the long term.” Gordge explains. “Although we always need to look for historic trends in claims data, akin to other business lines, one of the key differentiators of war and terrorism insurance is that the past cannot predict the future.

“Thinking about the multitude of geographic regions, perils and organisations that have individually been the main cause for concern for war and terrorism underwriters at different points over the past 12 years shows how dynamic the ‘risk’ we’re trying to price and provide an appropriate insurance solution for is.”

Gordge admits it’s been a challenging couple of years for the PVT market as she and her team navigate an increased focus on this business line from reinsurers and Lloyd’s, due to heightened geopolitical risks, including the Kenya anti-bill protests, the imposition of martial law in South Korea, and the Russia-Ukraine and Israel-Hamas conflicts, that have brought the policies they underwrite into the mainstream media. It’s been a period, she says, of balancing the portfolio and clearly articulating the underwriting strategy for it to various stakeholders, while focusing on maintaining coverage at sustainable levels for insureds at a time when there is an acute need for PV insurance.    

“Looking ahead, the ongoing conflicts in Ukraine and the Middle East are likely to have repercussions in the regions themselves,” Gordge predicts. “Due to ongoing war losses, protest and potential coup d’etat risks, linked to large displacement of people. According to our findings, this combination of factors could result in an increase in terrorist attacks, following the radicalisation of individuals who are far removed geographically from these wars but have been influenced online to be sympathetic towards radical causes.”  

She continues that from a dataset of 231 US based IS terrorists that were recorded between 2010 and 2020, online activity was found to be present in 92% of all cases and more than 80% interacted online with co-ideologues. Meanwhile, 80% used social media platforms for at least some of their activities and 36% had disseminated propaganda online.

Gordge explains: “Online polarisation continues to seep into the political make-up of many countries’ ruling parties – potentially raising risks of protest and counter-protest movement clashes, as well as increasing incidents of lone wolf attacks. Organised crime groups also continue to present the highest risk to businesses and individuals in many regions of the world and, therefore, insurance buyers need to be provided with adequate protection from the potential damage that these groups can cause,” she asserts, highlighting the security situation in Tabasco, Mexico, as a prime example where a reported 193% year-over-year increase in the number of homicides and a 180% rise in reported kidnapping cases were documented between January-October, last year, alone.

Gordge stresses that the PVT market has a fundamental obligation to investigate and closely monitor the likely impacts of these events and what the longer-term effects – both direct and indirect – could have for end clients when disaster implodes.

“It is important the market strives to ensure it interrogates policy coverage, exclusions and pricing to make sure the clients who rely on insurance when they’re impacted by political violence events find the coverage responds as they expect, while being provided access to crisis management services from their carriers.” Gordge concludes.

“The war and terrorism market will continue to be a complex line of insurance, because the risk that is insured is constantly evolving itself, and so, to continue offering tailored solutions, the market needs to keep evolving and adapting.”