Global business leaders are increasingly recognizing that today’s environment is not defined by isolated shocks but by a constant churn of overlapping crises. Political instability, terrorism threats, economic sanctions, and ‘grey zone’ aggression are no longer anomalies; they represent the backdrop against which strategic decisions must be made.
Pamela Thomson-Hall, CEO of international and head of risk and broking international at WTW, stated, “We find ourselves in a tremendous period of uncertainty… It took me four weeks to write this because every time I wrote it, something would change, and I had to start again.” This sentiment resonates with many leaders who feel the weight of constant unpredictability in their decision-making processes.
WTW’s recent survey of emerging risks found that geopolitical risk now ranks among the top three concerns for CEOs, alongside cyber threats and artificial intelligence. The survey highlights how the global landscape is shifting, making it critical for organizations to adapt swiftly to an ever-evolving risk environment.
As organizations grapple with these challenges, their risk management heads noted several factors that contribute to operational instability. Recent elections, government-business misalignment, sanctions regimes, fuel price volatility, and fears over trade routes and supply chains are now pressing concerns that demand immediate attention from leadership.
In a world where most CEOs consider themselves the chief geopolitical officer, there is an urgent need to rethink traditional models of global expansion and supply chain resilience. The blurred lines between war and peace create a complex environment where businesses must navigate ‘grey zone’ activities—including cyberattacks, disinformation campaigns, and targeted economic pressure—normalized in today’s political climate.
“You only have to look at what Elon Musk did to the British prime minister over historic legal policies to see how grey zone aggression can be very impactful,” Thomson-Hall remarked, highlighting the unpredictable nature of modern geopolitical interactions.
Adding to this complexity is the alarming rise of politically motivated violence. WTW anticipates that continued polarization and civil unrest will intensify, particularly in emerging markets where financial distress is compounded by increasing energy and food prices. Right-wing movements, conspiracy theories, and radicalized lone-wolf actors further complicate the threat landscape.
New technologies exacerbate these risks. Thomson-Hall warned, “Emerging technologies like low-cost drones and 3D printed weapons continue to present new security threats.” Such innovations demand that businesses move beyond siloed approaches to risk management in favor of integrated strategies that encompass political, operational, cyber, and reputational risks.
The Evolution of Insurance
In this volatile environment, the role of insurance is evolving from simple financial indemnity to a strategic enabler. Thomson-Hall emphasizes the importance of specialty insurance covers, such as political violence and terrorism (PVT) insurance, as well as political risk covers that help businesses maintain the confidence to invest, trade, and expand.
“Businesses can protect themselves from risks that seem beyond their control, whether it’s a change in government, a terror attack, or civil unrest,” she explained, underscoring the safety net these products can provide during tumultuous times. Interestingly, despite the broader risk environment, the PVT market is softening. Rates fell between 2.5% and 10% across many categories last year, driven by increased competition and an influx of new capacity.
While some high-risk areas remain exceptions, many clients now experience more flexible offerings from insurers, including coverage enhancements that had been previously retrenched during harder market phases. However, Thomson-Hall noted that clients value consistency and continuity in their insurance providers. “Those who take a longer-term approach will reap rewards over their competition,” she said, highlighting how crucial effective risk management is in retaining clients.
Dubai’s Strategic Hub
In this shifting geopolitical landscape, Dubai has emerged as a pivotal hub, offering stability, connectivity, and an international mindset critical for businesses operating in uncertain times. Thomson-Hall characterized Dubai as “a beacon of stability and continuity for the region,” emphasizing its secure environment for clients and partners alike.
As an Arabic-speaking international financial services hub, Dubai is uniquely positioned to facilitate risk transfer against the instability affecting businesses globally. Its appeal is further enhanced by a strong inflow of experienced professionals and strategic investments in financial services, granting organizations access to vital global expertise paired with regional knowledge.
Thomson-Hall cautioned that success in Dubai requires more than just competitive pay to retain talent. “We need talent strategies that do more than just pay people to retain them. We need to inspire them and ensure they feel part of a global community,” she urged, emphasizing the importance of nurturing talent in a competitive landscape.
Integrating Political Risk Management
As geopolitical volatility increases, businesses can no longer afford to treat political risk as an externality; it must be integrated into core business strategies. This integration should be supported by data-driven insights, expert guidance, and innovative insurance solutions. “Risks present opportunities,” Thomson-Hall concluded, reflecting a mindset that prioritizes courage and adaptability in the face of uncertainty.
