Global | Publication | February 2025
Geopolitical risk encompasses the influence of political, economic, and social factors on international businesses and can significantly affect economic and financial outcomes.
A fragmented legal and regulatory landscape
Recent shifts in global dynamics, including political instability, conflicts, and regulatory changes, are challenging the once-co-operative international landscape. Increasingly, the business environment is characterised by isolationism, making risk mitigation difficult for insurers. The insurance industry faces complex challenges, as geopolitical volatility stretches supply chains, exposes regulatory vulnerabilities, and (in some cases) creates legal and regulatory divergence, necessitating adaptive legal strategies.
Impacts on the insurance industry
The impact on the insurance industry arising from global geopolitical discord can range from navigating novel dispute resolution challenges to addressing changes in coverage for relevant insurance policies designed to mitigate such political risk.
The outcome of key elections around the world in 2024, particularly in the US, could also significantly influence the regulatory environment in which insurers are required to conduct their businesses, presenting both opportunities and challenges.
Hot topics
We explore some key themes including:
The future
The current geopolitical landscape presents an array of challenges for insurers, from regulatory compliance across fragmented legal systems to adapting commercial contracts for risk mitigation.
The market must prepare for ongoing geopolitical volatility by investing in dynamic risk assessment tools, strengthening compliance programs, and ensuring they have adaptive strategies for cross-border disputes.
The insurance industry’s resilience depends on these proactive legal strategies, allowing insurers to navigate novel risks and protect their global operations amid the uncertain geopolitical future.
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