How businesses and individuals protect assets amid rising conflict in Ukraine and the Middle East
As conflicts in Ukraine and the Middle East continue, a little-known industry is seeing unprecedented growth: war risk insurance. This specialist coverage protects homes, businesses, and assets from damage caused by war, terrorism, and civil unrest.
For Ukrainian residents like Natalia Grishko, the difference was clear. Last November, a Russian missile damaged her apartment, but her war risk insurance policy paid out for the repairs, giving her peace of mind amid chaos. Similarly, Ekaterina Vasylieva insured her car the day before it was hit by Russian shrapnel in Odesa — a timely decision that saved her thousands.
While individuals can buy coverage, the majority of policies are taken out by companies to protect operations, staff, and facilities in high-risk regions. Industry estimates suggest global spending on war risk insurance now exceeds $1 billion annually, with nearly 80% flowing to specialist insurers in London, the hub of the market.
Experts highlight that premiums vary depending on risk severity. For British or American companies operating in volatile areas like Lebanon or Israel, premiums can range from 0.5% to 2% of total coverage, while in more stable regions like the Gulf states, rates drop to 0.025% to 0.05%.
Coverage is broad and adaptable, spanning terrorism, civil unrest, sabotage, and interstate war, with insurers often offering multi-tiered “buckets” of protection. This flexibility is crucial because many conflicts evolve rapidly, making it hard to distinguish between terrorism and war risks.
London’s dominance in the sector is reinforced by Lloyd’s of London, home to war risk insurers and reinsurers, which spread risk across multiple firms to protect against massive losses. Analysts note that while war risk insurance is challenging to price due to the unpredictable nature of conflict, it can also be highly profitable compared to traditional insurance sectors.
With global conflicts showing no signs of abating, war risk insurance continues to be a lifeline for businesses and individuals navigating the growing threats of political violence and war-related damage.