Brokers warned as Middle East tensions push war risk premiums up 60% – GlobalData

UK brokers have been warned to reassess their assessment of geopolitical risk as rising tensions in the Middle East trigger sharp increases in war risk premiums, according to new research by data and analytics firm GlobalData.

The alert follows the conflict involving Iran, Israel and the US, alongside a crisis in the Strait of Hormuz – a key shipping corridor.

GlobalData stated that the developments had compelled insurers and syndicates to reassess their exposure to marine, energy and aviation risks, with brokers now expected to adjust their client guidance accordingly.

Despite these rising tensions, political instability was viewed as the greatest threat by just 8% of brokers surveyed in GlobalData’s UK Commercial Insurance Broker Survey, published in June 2025. Global instability was flagged by fewer than 1%.

Instead, brokers cited commercial challenges, such as competition from other brokers (13.2%) and direct insurers (11.2%) as their primary business risks for the year.

This contrasts with consumer sentiment. In its Emerging Trends Insurance Consumer Survey, also published in June 2025, GlobalData found that 43.3% of global consumers were “very concerned” about war and terrorism, with a further 37.5% “somewhat concerned”.

Charlie Hutcherson, insurance analyst at GlobalData, said: “While geopolitical instability has not been a primary concern for brokers, the recent developments in the Middle East are prompting renewed scrutiny across key insurance lines, including marine, energy, aviation and political risk.”

‘Critical discussion point’

In June 2025, the Joint War Committee met to evaluate threats to shipping in the Strait of Hormuz and the Eastern Mediterranean. Although it did not update its list of high-risk areas, brokers reported that war risk premiums increased by over 60% month-on-month.

Hutcherson added: “Brokers may be underestimating the strategic impact of geopolitical risks. The recent surge in war risk premiums is a clear signal that insurers are repositioning. As conflict dynamics evolve rapidly, particularly around Iran, brokers will likely need to reassess their client risk assessments and policy recommendations.

“War risk cover, once a niche product, is re-emerging as a critical discussion point. As syndicates revise their models and reinsurers reassess exposures, brokers will need to keep pace to ensure clients are adequately protected.”

He continued: “The market’s cautious response reflects a balancing act between preparedness and not overreacting – but that window for reaction may narrow quickly.”

GlobalData’s broker survey was conducted during January and February 2025 with 250 respondents. The consumer study polled 5,520 participants across 11 countries, with a minimum of 500 responses per market.