Geopolitical instability has been identified as the biggest threat to the aviation sector by insurers.

As world leaders met at the NATO summit amid ongoing fears that the fragile Israel -Iran truce and the pledge for European nations to increase defence spending to 5% of GDP the aviation sector is at the heart of the risks faced by the world.

Middle Eastern airspace is at the heart of many international flights to and from Asia and Europe and any restrictions on the ability to traverse the region would have profound effects.

According to the results of a new industry survey. Around two-thirds of respondents working for international aviation insurers and reinsurers put the impact of war and international conflicts at the top of their list of concerns.

Their views were sought during research conducted by the International Union of Aerospace Insurers’ (IUAI) Cyber and Emerging Risks Study Group, which is chaired by Tom Hughes of the International Underwriting Association (IUA) and Florian Zierer of Swiss Re.

Other risks most popularly identified were an increase in natural catastrophes, supply chain problems, a lack of skilled personnel and malicious cyber-attacks. A total of 84 senior professionals in the aviation re/insurance sector were polled for the survey.

Hughes, Director of Underwriting at the IUA, said: “Aviation insurers are monitoring closely the development of many new technologies and emerging threats. The use of artificial intelligence, new aircraft types and the transition away from fossil fuels all have the potential to transform risk profiles in what is a fast-changing industry.

“But when asked to pin down the single most important threat over the next five years, there was a very clear winner. The number of experts identifying geopolitical instability was almost seven times higher than that for the next most significant risk.”

Elsewhere in the survey, claims inflation emerged as the most important challenge facing aviation insurers and reinsurers themselves. This was closely followed by market conditions and rate adequacy.

For airports and aviation operators, the highest priorities were thought to be attritional ground incidents, air traffic control issues and runway incursions.

Hughes and Zierer took over as co-chairs of the IUAI Cyber and Emerging Risks Study Group in March this year. The Group was originally formed in 2018 to examine the potential impact of emerging risks on the aerospace sector. Whilst the initial focus was on cyber threats, its remit has gradually expanded to look at other emerging risks, particularly those associated with the industry’s increased attention on sustainability and environmental impacts.