Supply chain insurance is increasingly seen as “must-have” protection amid global instability, but some insurance companies are wary of covering such unpredictable threats, according to analysis from GlobalData, a London-based research and data provider.
The rising demand comes as ongoing conflicts in the Middle East and Eastern Europe are creating specific trade bottlenecks such as those in the Suez Canal and Strait of Hormuz, leading to widespread shipping reroutes, while alternative maritime corridors are emerging. Meanwhile, the U.S. shift toward economic nationalism—marked by sudden tariff hikes, export restrictions, and sanctions—is pressuring international trade supply networks, GlobalData said.
Pressed by those conditions, businesses overwhelmingly view the fallout of geopolitical tensions through the lens of indirect operational disruption, seeking products that safeguard their daily commercial operations.
To gain that safety, research shows that supply chain insurance (41.1%) is the product expected to see the highest demand due to geopolitical tensions, coming in far ahead of cyber insurance (20.6%), business interruption insurance (15.0%), marine insurance (14.0%), and political risk insurance (9.3%). The data comes from a poll conducted by GlobalData on Verdict Media sites in Q2 2026, which garnered over 100 responses from industry insiders.
“Organizations are deeply concerned about business continuity amid the cascading risks linked to a highly volatile geopolitical landscape,” Beatriz Benito, Lead Insurance Analyst, GlobalData, said in a release. “In contrast, demand for specialist transport and direct asset protection is lower. This highlights that organizations are deeply concerned about trade route blockages, state-sponsored cyberattacks, and collateral revenue losses that can have a cascading effect on operations, threatening day-to-day business continuity.”
However, despite demand for more insurance, insurers are struggling to adapt to the rapidly changing risk landscape, reducing the amount of coverage they’re willing to extend due to a fear that the risks are unquantifiable, Benito said.
“Only insurers with the most risk appetite are willing to adapt their underwriting strategies and product offerings. This requires providers to tighten policy wordings and exclusions around tariffs and sanctions, as well as to stress-test products to avoid catastrophic losses from a single event,” she said.
Facts Only
* Supply chain insurance demand is increasing due to global instability.
* Conflicts in the Middle East and Eastern Europe create trade bottlenecks in areas like the Suez Canal and Strait of Hormuz, leading to shipping reroutes and emerging maritime corridors.
* U.S. economic nationalism, including tariff hikes, export restrictions, and sanctions, is pressuring international trade supply networks.
* Supply chain insurance is expected to see the highest demand due to geopolitical tensions (41.1%).
* Demand ranking for insurance products related to geopolitical tensions is: supply chain insurance (41.1%), cyber insurance (20.6%), business interruption insurance (15.0%), marine insurance (14.0%), and political risk insurance (9.3%).
* Organizations are concerned about business continuity amid cascading risks from the volatile geopolitical landscape, trade route blockages, state-sponsored cyberattacks, and collateral revenue losses.
* Insurers are struggling to adapt due to fear that geopolitical risks are unquantifiable.
* Insurers require providers to tighten policy wordings regarding tariffs and sanctions and stress-test products against single events.
Executive Summary
Demand for supply chain insurance is rising due to geopolitical instability, as ongoing conflicts in regions like the Middle East and Eastern Europe create trade bottlenecks and force shipping reroutes through alternative corridors. This increased need stems from the pressure on international trade networks caused by U.S. economic nationalism, including tariff hikes and sanctions. Research indicates that supply chain insurance is expected to see the highest demand among various insurance products related to geopolitical tensions, significantly outpacing demand for cyber, business interruption, marine, and political risk insurance.
Insurers are experiencing difficulty adapting their offerings because they perceive risks associated with geopolitical events as unquantifiable. This has led insurers to limit coverage expansion, prompting a need for providers to refine underwriting strategies by tightening policy terms related to tariffs and sanctions, and stress-testing products against single catastrophic events.
Full Take
The narrative frames a shift from traditional, tangible operational risks (like marine insurance) to intangible, systemic risks stemming from geopolitical volatility. The core tension lies between the observed, demonstrable need for protection—evidenced by high demand for supply chain coverage—and the reluctance of the insurance sector to quantify these novel threats, which results in a market friction where risk appetite dictates insurer adaptation rather than pure need.
The specific emphasis on supply chain insurance over other related risks suggests an inherent distrust in siloed risk management; when trade routes are disrupted by external political forces, the impact is inherently systemic and operational, leading businesses to seek holistic protection rather than managing discrete insurance lines. The requirement for insurers to tighten exclusions and stress-test products implies a structural challenge: defining the boundaries of unquantifiable geopolitical risk for underwriting purposes.
The pattern observed suggests that when high-impact external events occur, there is an immediate flight toward generalized financial mitigation (insurance) over specific operational management, driven by the cascading threat to day-to-day continuity. The implication is that the market is demanding insurers adopt a more integrated, predictive model of global systemic risk, moving beyond traditional risk classifications to address interconnected fragility.
Bridge Questions: What are the mechanisms or data frameworks currently being proposed or adopted by insurers to quantify non-linear geopolitical impact? How does the perceived disparity in demand for specific insurance types reflect differing organizational tolerances for risk allocation across different sectors? If organizations mandate certain risk sharing structures, what regulatory incentives would be necessary to force insurers to adopt a unified quantification standard for systemic geopolitical threats?