When geopolitical risk becomes familiar, complacency becomes the greater risk

By Vanesa Herrero, Chief Executive Officer - Tokio Marine Europe S.A.

Geopolitical volatility has become a familiar feature of the risk landscape. The danger is that familiarity can make persistent disruption feel less exceptional than it really is.

Recent movements in war-risk pricing around the Strait of Hormuz and disruption in the Red Sea have shown how quickly geopolitical events can alter the cost, availability and practicalities of moving goods. What be gins as an exceptional event can rapidly become part of normal operational planning, even while the underlying risk remains highly volatile.

For risk managers, that distinction matters. Repeated disruption does not necessarily make a risk easier to ma nage. It can simply make it easier to underestimate. A single geopolitical flashpoint can affect several parts of an insurance programme at once. Marine cargo may need to respond to changing routes and accumula tions. Hull and war-risk exposures can shift rapidly. Po litical violence and terrorism risks can change as events develop, while the wider consequences of disruption can create financial, contractual and management expo sures. The effect is often felt before any claim is made. A diverted route can add time and cost to a voyage, disrupt supply chains and affect production schedules elsewhe re. For internationally connected businesses, the conse quences can spread well beyond the original flashpoint.

In that environment, depth of expertise within each line of business becomes particularly important. Marine cargo, political violence and financial lines each require a detailed understanding of different exposures, policy triggers and market dynamics. That specialist knowledge enables insurers to assess how an individual business is affected and to structure cover around its particular ope rations, geographies and risk profile rather than relying on a standard solution.

“The businesses best placed to navigate the uncertainty will be those that understand their exposures in detail”

Price will always matter, particularly when volatility pushes costs higher. But risk managers also need insu rance partners with the experience to understand com plex and changing exposures, and the underwriting ex pertise to tailor solutions as those needs evolve.

In a geopolitical environment where conditions can change quickly, continuity of expertise, appetite and dialogue can matter as much as the price of any single renewal. The businesses best placed to navigate that un certainty will be those that understand their exposures in detail, and have insurance structured around the way they actually operate

This article was originally published by Actualidad Aseguradora magazine its “FERMA Forum 2026” special edition and is republished here with permission. The original publication is available on the Actualidad Aseguradora magazine online version, page 65.