Mid-East conflict drives up cyber risks

London-based GlobalData, a data analytic and consultancy firm, has warned that the Middle East conflict is driving new assessments of maritime and trade risks as well as digital threats. A significant number of insurance experts believe that cyber insurance will see the strongest increase in demand, according to a GlobalData poll.

More than a quarter of respondents, 27.4%, identified cyber insurance as the product line likely to grow fastest as a result of current geopolitical instability. According to the poll results, cyber insurance now ranks higher than political risk cover, supply chain insurance, and business interruption policies.

Charlie Hutcherson, GlobalData Insurance analyst, commented: “Geopolitical flashpoints are increasingly being priced not just through marine war-risk and political risk lines, but through expectations of cyber escalation. GlobalData’s poll shows cyber insurance is viewed as the commercial product most likely to see rising demand, as businesses anticipate a higher probability of disruptive cyber events alongside physical disruption to trade routes.

“While underwriters are already reassessing exposures tied to shipping and energy corridors such as the Strait of Hormuz,” he continued, “the bigger shift is that companies are planning for conflict spillover into Western markets through cyber activity. As a result, insurers will face additional pressure to refine cyber risk appetite, pricing, and accumulation management if they want to meet customer needs and retain business in an increasingly volatile environment.”