The increasing severity and spread of warfare and strife from Eastern Europe and Asia to the Middle East and Central America is making travel abroad more perilous than ever. Yet it’s business as usual for much of the world, and travel to locales close to areas experiencing political unrest is sometimes unavoidable.

It seems few corners of the world have escaped discord. The Russia-Ukraine war continues, increasing the danger of traveling to bordering countries. Escalating violence between Turkish security forces and armed Kurdish groups in Iraq and Syria, civil unrest in Egypt and the Israel-Hamas war have made travel to much of the Middle East a risky endeavor. And increased military deployment on the China-India border, hostile actions in the South China Sea and renewed conflicts in South Sudan due to the imminent national elections in 2024 also present new challenges.

With these elevated levels of friction and outright war, underwriters are increasing deductibles for travel to places such as Israel, Taiwan, China, Ukraine, Russia and Poland. The geopolitical effects on travel insurance also include tighter terms and additional exclusions.

Simply acquiring some coverages is proving problematic. For instance, more carriers are withdrawing from the terrorism insurance sector, and reinsurers are withdrawing from the war risk market, increasing the crunch on primary insurers.

Framing geopolitical effects on travel insurance

To start minimizing risk, the first step is determining if travel is absolutely essential. The best way to frame this question is to ask, “How will the outcome change if my representative cannot be there in person?”

If a trip to a dangerous area is unavoidable, it’s crucial to research and plan every step of the trip, contact foreign offices or embassies for guidance, procure security detail and ensure that your broker reviews policies related to the risk.

Companies must also answer difficult questions and meet specific requirements from insurers. Many will require a 24/7 security detail and most will advise procuring kidnapping and ransom coverage. In addition, unless the insurance is a “cancel for any reason” policy or one with civil unrest or war exclusions, no coverage will be provided if the trip is canceled due to a wartime or terrorism act or dangerous political situation.

Exposures beyond travel

Companies also need to consider how conflict and war are affecting risk management throughout the organization. Some of these risk management considerations include:

  • Marine policies. With port closures, scheduling changes and even ship attacks, underwriters expect more claims for cargo theft, the destruction of perishable goods and seizure of goods by government due to civil unrest. As a result, insurers are largely issuing short-term, short-rated policies. Organizations need to continually assess and reevaluate their coverage to ensure it provides adequate protection or find additional coverages to plug gaps.
  • Business interruption coverage. Political upheaval and military conflicts will affect supply chains. With waterways coming under threat and potential attacks on power supplies, it’s crucial to consider the exclusions in business interruption policies and how they could affect coverage.
  • War and terrorism policies. Historically, these add-ons are expensive — and today, they’re even costlier. In addition, many will not cover malicious damage from political risks. Make sure your organization’s war and terrorism policies line up with its risk management profile.

The escalating conflicts worldwide present risk management challenges for companies operating on a global scale. Working with knowledgeable advisors will put you in the best position to survive and thrive when travel to dangerous areas is a must.

Contact HUB International’s global risk advisors to learn more about protecting your organization in areas experiencing conflict.