For the insurance industry, and especially the Political Violence & Terrorism (PVT) business, the war in the Middle East may lead to significant losses in some areas and new risk assessments for selected key industries and regions, according to the "Political Violence and Civil Unrest Trends 2026" report from Allianz Commercial.
The report added, “Based on current estimates, the financial loss quantum has the potential to result in a costlier event than PVT claims resulting from the war in Ukraine.”
The US-Iran conflict has disrupted the global economy significantly. Businesses impacted by armed conflict face significant challenges, including supply chain disruptions, loss of market access, as well as the risk of cyber attacks and sabotage, the report notes.
Political risks and violence hit all-time high at #7 on Allianz 2026 Risk Barometer
War has overtaken civil unrest as the political violence exposure companies fear most (53% of all respondents globally).
Around 60% of respondents from Europe and Asia-Pacific see war as the top risk. Civil unrest ranks at #2 globally (49%), terrorism/sabotage is at #3 (46%).
Political risks and violence has climbed to #7 in the annual “Allianz Risk Barometeraa 2026”, its highest position ever, highlighting the fact that such perils have joined mainstream business risks in a world of tumult. The Barometer ranked political risks and violence at #9 in 2025 and #8 in 2024.
Depending on the duration of the conflict in the Middle East, a heightened risk of SRCC (strikes, riots, and civil commotion) activity is also to be expected, particularly in countries heavily reliant on Middle Eastern oil and gas or fertilisers.
Risk mitigation
The US-Iran conflict is likely to have a significant impact on risk mitigation moving forward. According to the Allianz Risk Barometer, prior to the conflict just over a third (35%) of companies were already exploring nearshoring and evaluating domestic manufacturing options, 32% were looking to improve inventory management, including storing inventory in Free Trade zones, and almost half (49%) were looking at renegotiating and diversifying supply chains, as strategies to adapt to shifting geopolitical risks. Such trends will likely be accelerated by the conflict.
Mr Srdjan Todorovic, Global Head of Political Violence and Hostile Environment Solutions at Allianz Commercial, said,“As we navigate this era of heightened uncertainty, understanding the implications of these risks and mitigating them in our interconnected business ecosystems has never been more critical. Insurance has a key role to play in this regard, and demand for political violence insurance continues to grow. We see an elevated level of interest and more buyers than ever in this space. Clients are broadening their coverage to better fit their risk footprint. This is a marked change from before the war in Ukraine, and which is now amplified by subsequent events.”
To read the “Political Violence and Civil Unrest Trends 2026” report, please click on this link.