Rising geopolitical tensions are set to drive a rapid increase in demand for political risk insurance, according to intelligence platform GlobalData.

The US–Israel war with Iran is destabilising much of the surrounding Middle East, with businesses such as hotels, data centres, and pipelines facing heightened risk of damage.

Geopolitical tensions have seen demand for cyber insurance grow sharply since the start of the Russia-Ukraine war, but GlobalData’s poll data suggests demand for political risk insurance is rising almost as quickly. Recent events have seen missiles hit places such as the Fairmont at the Palm hotel in Dubai, and areas across the region between Israel and Iran are currently at risk from missile attacks and downed drones.

A GlobalData poll conducted in Q3 and Q4 2025 found that insurance insiders believed cyber insurance would see the highest demand due to geopolitical tensions. But one in four respondents believed that political risk insurance would. Supply chain insurance is also likely to be popular now with heavy restrictions in major shipping routes.

Ben Carey-Evans, senior insurance analyst at GlobalData, explained: “Political risk insurance is important to businesses near potentially dangerous zones, as most insurance policies have war exclusions. This means that if a hotel, for example, is damaged by any kind of military strike, a traditional commercial property or business interruption policy may not pay out. There may also be legal grounds to dispute the terms of that particular contract. The risk of damage caused by intercepted missiles or accidental strikes is extremely high in areas such as the UAE and Qatar at present.”

He added as the conflict continues, major tourist hubs such as Dubai and Abu Dhabi face heightened exposure. The likelihood of high-value property damage is significant, which is likely to drive further demand for political risk insurance.

Carey-Evans concluded: “It is clear that insurers looking to sell political risk insurance (or cyber, or supply chain insurance) will see a huge spike in business throughout 2026. However, they will be taking on significant risk in doing so, so pricing the product and understanding the level of risk they are exposing themselves will be critical.”

Broker Marsh said they had seen an uptick in demand for the cover.

It explained: “Recent global civil unrest events have increased awareness of the associated risks, leading to significant shifts in the political violence insurance marketplace. In certain territories, rates and limits are increasingly being challenged and terms and conditions are being reviewed, in particular for the Middle East. For other high-risk territories, such as Ukraine, underwriters continue to exercise caution, often driven by treaty restrictions and risk appetite.

“The evolving conflict in the Middle East is creating significant risks for businesses across sectors and geographies, driving clients to reevaluate their limits purchased, the scope of policy terms and conditions, and their contingency plans. Marsh is closely monitoring the situation and helping clients navigate potential people-related and operational risks, insurance and risk management implications, and investment and financial impacts.”

Marsh concluded: “Insurers are reviewing programs and client data, including potential contingent business interruption impacts that might emanate from supply chains disrupted by the recent conflict. Insurers are also more closely assessing key socio-economic indicators, such as food price index values, GDP, and wealth disparity, that could influence coverage and conditions.”