Geopolitical instability, digital infrastructure are reshaping global insurance markets: Willis report

New York, NY (May 7, 2026) – Willis, a WTW business, has released its latest Insurance Marketplace Realities report, revealing a global insurance market entering a more complex phase shaped by geopolitical volatility and the rapid expansion of digital infrastructure.

Political risk is no longer confined to specific sectors, with impacts now extending across supply chains, infrastructure, and financial systems. Recent developments in the Middle East are driving notable shifts in the political risk insurance market, with rates in Gulf countries expected to increase by as much as 20-30%. By contrast, rates for both traditional political risk insurance and trade disruption insurance are expected to remain flat or increase by just 5%.

These changes reflect a broader reassessment of risk. Insurers are increasingly evaluating exposures through a national security lens, while businesses are elevating political risk insurance as a core component of enterprise risk management. At the same time, geopolitical forces are driving systemic effects across global markets, influencing everything from capital flows and regulatory environments to operational continuity.

“Geopolitical uncertainty is no longer a background risk. It’s a primary driver of volatility across the insurance market,” said Jackie Bolig, Head of Placement and Broking Solutions for Corporate Risk & Broking, North America. “From supply chain disruption to energy security and regulatory divergence, we’re seeing global events translate into real, immediate impacts on risk and cost. Organizations need to evolve their risk strategies to account for a world where disruption is faster, more interconnected and harder to predict.”

Technology is also reshaping the risk landscape. Demand for AI and cloud computing is accelerating investment in data centers and digital ecosystems, which are increasingly viewed as critical infrastructure. These assets introduce new exposures across physical, cyber, energy, and regulatory domains, driving the shift toward more integrated risk management approaches.

Additional findings from the report include:

• Buyers’ Market Conditions Persist Amid Growing Risk Complexity: Favorable pricing continues across many lines for risks with strong loss histories, but mounting challenges, including tariff uncertainty, climate volatility, third-party litigation funding, AI and digital dependency, and geopolitical instability, are reshaping the risk landscape.
• Property Insurance Market Continues to Soften Despite Climate Volatility: Increased insurer competition and improved reinsurance conditions are driving meaningful rate reductions of up to 15% for single-carrier programs and up to 25% for shared and layered placements. At the same time, “secondary perils” such as wildfires, floods, and severe storms are becoming more frequent and costly, expanding risk beyond traditionally exposed regions and complicating underwriting strategies.
• Tariffs Are a Pressure Point in an Otherwise Resilient Trade Credit Market: Despite rising bankruptcies and claims, the trade credit market remains highly competitive. However, tariffs are emerging as a key risk, adding inflationary pressure and squeezing corporate margins, which could test credit quality as businesses adjust to higher costs and shifting supply chains.
• Healthcare and Litigation Trends Intensify: Healthcare suits are getting bigger and more expensive. The average of the top 50 medical malpractice verdicts rose from $32 million in 2022 to $56 million in 2024, a 75% increase. Additionally, investor-backed litigation claims are associated with a 60.5% increase in payouts.

The industry is experiencing a pace of change that, not too long ago, would have seemed unimaginable. With this rapid evolution come both opportunities and uncertainties. The full Insurance Marketplace Realities report is available at: Insurance Marketplace Realities 2026 Spring Update.

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SOURCE: WTW

Tags: Digital Innovation, market dynamics, Willis Towers Watson (WTW)