Political violence and terrorism

Key developments in 2025

The climate of war, civil or otherwise, across the globe has continued with the International Institute for Strategic Studies (IISS) calculating active armed conflicts worldwide, and their average duration, to remain amongst the highest in decades. Insurers continued to address notifications from the Russo-Ukrainian War, Sudan, the Israel-Palestine conflict, and Myanmar. The situation between the Democratic Republic of Congo and Rwanda has continued to inflame, and Ugandan troops are also increasing involvement for their vested interest against the M23 rebels. In more recent news Thailand and Cambodia have re-engaged in border clashes at the end of this year in breach of a US brokered truce between the two nations.

The impact of US involvement has remained important for insurers in these conflicts as its geopolitical stance could not only dictate the length of a conflict, but also any consequent sanctions. This is made difficult by the fact that, at times, any attempt to predict the US stance has been difficult and this has made risk analysis problematic for insurers.

To this point, just before going to print on this publication, the US were involved in a military operation of their own. Operation Absolute Resolve was undertaken in Venezuela with numerous locations (reportedly including military bases, La Guaira Port and Higuerote Airport) hit by airstrikes. The full nature of the damage caused by these strikes is yet to be seen but, given this development, insurers will be concerned about any further activity emboldened by this operation. President Trump has already made suggestive comments as regards Columbia and Greenland - who will be concerned about protection of their assets from an emboldened US.

We also predicted in last year's annual review that domestic political violence, terrorism, and wider active assailant incidents could be of increasing concern. This may not have resulted in any publicly reported insurance losses but there have, unfortunately, been examples of this trend continuing to increase pressure on PV and active assailant books. On 10 September, the American political activist Charlie Kirk was assassinated. In the United Kingdom, there was an attack on a synagogue during Yom Kippur as well as multiple arrests at Palestine Action protests (now designated a terror group following the vandalization at RAF Brize Norton). Even in the process of writing this review, a shooting at Bondi Beach in Australia was reported.

Finally, and starting on December 28th, riots in Iran have escalated from electronics vendors going on strike to school and office closures, deaths, and over 100 arrested for protests. The situation is made ever more tense by the emboldened President Trump's comments that, if the regime oversteps, the US is "ready to go".

What to look out for in 2026

Given the developments of this year, we unfortunately do not anticipate an improvement in global conflicts for the following. The focus on the US position will also remain, but with growing unpredictability comes an increased lack of reliance. There is a growing sentiment that US political impact may diminish (alongside its 'soft power') as nations looks elsewhere for support to prevent conflicts. The US itself may even be a source of further conflict moving into 2026. We have mentioned Greenland but the Americas in general will be live to the US sphere of influence following Operation Absolute Resolve.

Looking forward also to technological advances, there are a couple of developments which will give insurers cause for concern – even if not yet straying into traditional PV coverage. We start with drone technology which has been greatly accelerated by the Russo-Ukrainian war and may be the source of losses outside Ukraine moving forward. There have been several reported incidents where drones are being used outside of active conflict and causing disruption to key infrastructure. Brussels airport was forced to close in November and, most recently, Lithuania declared a state of emergency following a series of incursions from neighbouring Belarus

Separately, as the demand and reliance on AI technologies grow then the need for data centres, with physical vulnerabilities, will also grow. These assets are likely to be considered high value and critical infrastructure worth protecting. In a similar manner to undersea cables, these centres could become a target for malign state actors. Accordingly, PV coverage may be required, and we anticipate difficulties may arise as the lines between PV, cyber, and typical property insurance will need to be drawn.