Why has war become the top political violence risk for businesses?

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War Has Emerged as the Foremost Political Violence Risk for Businesses

War has now surpassed civil unrest as the primary political violence exposure that companies fear most, with 53% of global respondents identifying it as their top concern. This shift is largely attributed to ongoing conflicts in Europe and the Middle East, which are significantly disrupting global trade routes, straining international political relationships, empowering rival nations, and increasing the peril to corporate assets. In particular, the US-Iran conflict is currently a dominant feature in news cycles and has demonstrably unsettled the global economy.
Escalating Conflicts Intensify Business Threats

The current geopolitical climate, marked by conflicts in Europe and the Middle East, presents a complex web of challenges for businesses. These international disputes are not merely localized events but are actively reshaping global trade dynamics, creating friction between political allies, and providing opportunities for adversarial powers to assert influence. Consequently, the exposure of business assets to these heightened risks has seen a notable increase, with an estimated rise of over 20% in the last five years even prior to the recent escalation involving Iran.
Significant Business Disruptions Stemming from Armed Conflict

Companies caught in the path of armed conflict face a multitude of severe operational and financial hurdles. Beyond the immediate threat to physical assets, businesses are contending with profound supply chain interruptions, the potential loss of access to critical markets, and an elevated risk of sophisticated cyber-attacks and sabotage. The insurance sector, particularly the Political Violence & Terrorism (PVT) market, is bracing for potential substantial losses and is undertaking new risk assessments for key industries and regions due to the war in the Middle East, with financial implications potentially exceeding those of the conflict in Ukraine.
Long-Term Geopolitical Instability and Increased Risk Exposure

The prevailing trend of wars, the looming threat of future conflicts, and other forms of political violence are projected to destabilize geopolitical and economic landscapes not only in 2026 but for an extended period. Research indicates that certain industries and operational environments are inherently more vulnerable to the full spectrum of political violence risks, a pattern observed in recent years through protests and violence. However, it is crucial to recognize that no organization is entirely immune to these escalating threats, and the US-Iran conflict is expected to significantly influence future risk mitigation strategies.

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Why has war become the top political violence risk for businesses?

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