Personal Stories Highlight Rising Demand
When a Russian missile damaged her mother’s apartment on the outskirts of Kyiv last year, Alina Kalcheva was relieved she had purchased specialist cover. While standard home insurance excludes conflict-related damage, the war risk policy paid out $1,000 toward repairs – all for an annual premium of just $52.
Similarly, in April 2024, Ukrainian driver Ekaterina Vasylieva had just added war risk coverage to her car insurance when her vehicle was struck by shrapnel in Odesa. “The cover saved me a lot, because after the Russian attack the car looked like a sieve,” she said.
A Market Expanding Since 9/11
War risk insurance has grown rapidly since the 2001 terrorist attacks in the US. While individuals can purchase policies, the vast majority of clients are companies seeking to protect facilities, operations, and employees in high-risk areas.
Today, the global market is worth around $1 billion annually, with nearly 80% of that handled by specialist insurers in London. Premiums vary significantly: in volatile regions like Lebanon or Israel, cover costs 0.5–2% of the insured value, while in stable Gulf states rates can fall as low as 0.025%.
What’s Covered?
Policies can protect against a wide range of threats, from terrorism and sabotage to kidnappings, ransom demands, strikes, riots, or even “active assailant” scenarios. Coverage levels are divided into seven categories, ranging from low-level sabotage to full-scale interstate war.
“Many insurers try to offer full coverage, since it’s not always clear when a situation escalates from terrorism to civil war, or even interstate war,” says Raveem Ismail, founder of Trigger Parametric in London.
Why It Matters for Small Businesses
For multinational firms, war risk insurance can be worth millions. But the story carries lessons for small businesses too. Global instability affects supply chains, shipping, energy prices, and currency markets – factors that trickle down to even the smallest companies.
While most local businesses won’t be buying specialist war risk insurance, they can take practical steps to build resilience:
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Diversify suppliers to reduce dependency on one region.
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Monitor international news to anticipate disruptions.
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Strengthen online presence and digital sales channels, ensuring that even if physical supply chains falter, the business can still operate and reach customers.
In uncertain times, investing in stability – whether through insurance, digital tools, or diversified operations – can make the difference between business continuity and disruption.
Global Conflicts Drive Surge in War Risk Insurance – What Small Businesses Should Know
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1 min 34 sec
With conflicts ongoing in Ukraine and the Middle East, a niche corner of the global insurance market is seeing unprecedented demand: war risk insurance.
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