Client Alert: Navigating Geopolitical and Transportation Risks in the Middle East

Client Alert: Navigating Geopolitical and Transportation Risks in the Middle East
July 8, 2025 7 mins

Client Alert: Navigating Geopolitical and Transportation Risks in the Middle East

Responding to Heightened Risk in the Middle East

Evolving developments in the Middle East necessitate businesses operating in the region to reassess risk profiles by preparing for rapid and extreme scenarios. This requires flexible insurance, operational oversight and contingency planning to ensure resilience and real-time responsiveness.

Key Takeaways
  1. Ongoing geopolitical uncertainty demands dynamic insurance strategies, particularly in the areas of marine, cargo and political risk. Responses must be adaptable and continually updated for strategic locations to ensure business continuity amid instability.
  2. Businesses should proactively assess how changes to supply lines, shipping routes, security protocols and insurance coverage terms impact their risk transfer approach. This requires frequent risk analysis, coordination with logistics, legal and insurance teams and preemptive compliance planning.
  3. Rapid response times, real-time information sharing and role clarity between all parties — including insurers, brokers, risk engineers and operational teams — are vital for coordinated responses to potential disruptions.

Executive Briefing: Risk and Insurance in a Shifting Landscape

For global businesses — especially those in energy, shipping and logistics — the current risk environment in the Middle East underscores the need for proactive risk management and agile insurance strategies.

Insurance continues to play a vital role in enabling business continuity amid uncertainty. Across the maritime sector in particular, the demand for war risk and political violence insurance protection remains strong.

However, in an environment where risk boundaries can shift overnight, purchasing insurance coverage may not be enough — its ongoing adequacy must be assessed. For example, areas once not considered high risk may be classified as such within days, affecting availability, pricing and bringing possible exclusions.

In this context, companies must act across three parallel dimensions:

  • Continuous geo-risk identification and monitoring, including alternative routing and logistical exposure
  • Insurance structural flexibility — segregating marine vs. war risk, adjusting limits and enabling extensions
  • Use of real-time intelligence systems and close broker support for responsive decision making amid evolving regulatory and security landscapes

Effective management of geopolitical risks is not just protection — it becomes a competitive advantage. Companies that maintain stability and delivery capacity during crises strengthen their global credibility.

Key Transportation and Logistics Insurance Considerations

  1. GPS Interference and Navigation Disruption
    Significant GPS interference has been recently reported in the Gulf and Strait of Hormuz, posing risks for both maritime and aviation operations. Vessels and aircraft may experience spoofing or jamming, leading to navigation inaccuracies. It is advisable to consider integrated cyber insurance coverage, deploy GPS-independent backup navigation systems, and apply real-time risk monitoring platforms to support route planning and insurance evaluation.
  2. War Risk Terms and Flexibility
    Some marine insurers are shortening cancellation notice/validity periods on war breach rates (from 48 to 24 hours), allowing for rapid rate adjustments in response to changing conditions. Clients may want to review inland war insurance for cargo moved by road or rail within the region. Insurance flexibility is diminishing, and more focused, proactive management of war risks across transport modes may be required.
  3. Vessel Detainments
    A number of high-profile detainments have occurred in the past year, reminding operators and cargo owners to assess detainment scenarios within business continuity and insurance planning. The long-term impact of such incidents can significantly affect cargo, vessel and crew liabilities.
  4. Security and Threat Levels in the Red Sea
    Despite declared ceasefires, areas such as the Red Sea and Bab al-Mandeb Strait remain designated high-risk by underwriters due to ongoing regional conflicts, piracy and geopolitical tensions. Ongoing monitoring and adaptive security measures are essential for ship operators. Clear contractual responsibility must be defined between cargo owners, vessel owners and freight forwarders.

Wider Risk Considerations

  1. Energy Infrastructure and Physical Damage
    Operators in the power and energy sectors — often viewed as critical infrastructure — may face heightened exposure. Adequate insurance coverage must address not only direct property damage but also associated risks such as environmental liability and interruption to production. The insurance should be broad and tailored both operationally and geographically.
  2. Changes to Sanctions
    Organizations should remain vigilant in monitoring any changes to international sanctions. Whether through the expansion of existing sanctions, or the imposition of new measures on additional territories, such changes can significantly affect risk assessments and insurance coverage.
  3. Employee Travel
    Employers have a duty of care to safeguard traveling employees. This includes monitoring threat levels in country, preparing personnel prior to travel and having procedures in place to react to travel-related incidents.
  4. Business Continuity
    Delays — whether caused by security threats, logistical or geopolitical disruptions — can result in storage fees, contractual penalties, delayed delivery, brand damage, client attrition and lost future deals.

It’s essential to incorporate such scenarios into both risk and business continuity planning, including:

  • Mapping reliance on specific shipping lanes and assessing land/air alternatives
  • Appropriate delay-in-transit coverage
  • Reviewing whether current policies cover indirect costs in addition to physical loss
  • Early coordination with brokers to confirm policy response to route changes, port deviations or prolonged stays
  • Establishing a fast incident reporting and documentation process to support claim filing and internal operational reviews

Operational Recommendations for Managing Supply Chain Risk

  • Evaluate Insurance Options Strategically
    • Analyze gaps between insurance coverage and actual exposures.
    • Assess your current risk and insurance strategies, with a preference for modular, flexible programs that allow rapid adaptation to geopolitical or logistical shifts.
    • For cargo risks, enhance war risk insurance cover to include inland transportation, and explore stock throughput policies and alternative risk transfer solutions.
    • For construction projects, consider project cargo insurance, including delay in start-up (DSU) coverage.
  • Improve End-To-End Supply Chain Visibility
    • Focus on supply chain mapping and holistic logistics profile risk assessments to understand vulnerabilities, including second- and third-tier suppliers, who may present critical failure points.
    • Identify and implement integrated layers of loss prevention.
    • Review contracts to ensure liability management.
    • Introduce operational risk KPIs — such as critical inventory availability, response time to disruptions and capability to switch to alternative routing.
    • Designate control points along the logistics journey, each with a dedicated operational lead.
  • Leverage Emerging Technological Solutions
    • Use technology to maintain real-time supply chain visibility, track cargo, ensure product integrity, monitor compliance performance, identify varying levels of partner risk and implement corrective actions to prevent losses.
    • Invest in cyber resilience by implementing robust IT cyber security measures and training employees to recognize and prevent social engineering threats like phishing.
    • Establish automated response protocols — smart alerts for critical risk points in the chain.
  • Apply Risk Mitigation Measures
    • Leverage relationships with insurers to navigate challenges, as advocacy is crucial for claims. Include access to certified international loss adjusters.
    • Develop audit and compliance monitoring processes to ensure that loss prevention and risk mitigation procedures are followed to maintain supply chain integrity.
    • Conduct regular audits to ensure ongoing procedural adherence.

Your Business Resilience Checklist

For businesses operating in the region during these uncertain times, consider the following strategies to protect your operational resilience:

  • Engage with regional experts. Collaborate with knowledgeable brokers, certified loss adjusters and security advisors to navigate the complexities of the Middle East’s risk environment effectively. Include domain-specific specialist teams (e.g., transport, energy, security, regulation) so all risk dimensions are addressed.
  • Hold regular roundtables. Invite internal stakeholders, insurance brokers, risk consultants and key suppliers to ensure alignment.
  • Review and adapt insurance coverage. Conduct regular reviews of insurance portfolios to ensure adequate protection is aligned with current threats.
  • Develop comprehensive plans. Strengthen and test business continuity and crisis response strategies and integrate insurance solutions to address both immediate incidents and long-term disruption.
  • Invest in training and awareness. Educate teams on coverage nuances and build communication protocols for real-time decision making. Run simulations for complex scenarios (e.g., disruption + cyber attack + port delay). Establish a dedicated incident response team with clearly defined roles and pre-approved procedures.
  • Monitor developments. Stay informed of regional dynamics and remain agile in responding to evolving risk scenarios. Events can unfold quickly and businesses must aim to be ready for any scenario.

Talk to your risk advisor to access advice and solutions that can help your organization manage risks related to operating in the region.

Key Contacts

Rabih Asmar
Executive Director, Corporate Risk Solutions & Affinity, United Arab Emirates
[email protected]

Tom Bomford
Director, Marine Hull, Global
[email protected]

Karthick Gowrisanker
Regional Head of Marine, United Arab Emirates
[email protected]

Louie Grainger
Associate Director, Political Violence, United Arab Emirates
[email protected] 

Jord Oostrom
Chief Commercial Officer, Middle East
[email protected] 

Aon's Better Being Podcast

Our Better Being podcast series, hosted by Aon Chief Wellbeing Officer Rachel Fellowes, explores wellbeing strategies and resilience. This season we cover human sustainability, kindness in the workplace, how to measure wellbeing, managing grief and more.

Aon Insights Series Asia

Expert Views on Today's Risk Capital and Human Capital Issues

Aon Insights Series Pacific

Expert Views on Today's Risk Capital and Human Capital Issues

Aon Insights Series UK

Expert Views on Today's Risk Capital and Human Capital Issues

Client Trends 2025

Better Decisions Across Interconnected Risk and People Issues.

Construction and Infrastructure

The construction industry is under pressure from interconnected risks and notable macroeconomic developments. Learn how your organization can benefit from construction insurance and risk management.

Cyber Labs

Stay in the loop on today's most pressing cyber security matters.

Cyber Resilience

Our Cyber Resilience collection gives you access to Aon’s latest insights on the evolving landscape of cyber threats and risk mitigation measures. Reach out to our experts to discuss how to make the right decisions to strengthen your organization’s cyber resilience.

Employee Wellbeing

Our Employee Wellbeing collection gives you access to the latest insights from Aon's human capital team. You can also reach out to the team at any time for assistance with your employee wellbeing needs.

Environmental, Social and Governance Insights

Explore Aon's latest environmental social and governance (ESG) insights.

Q4 2023 Global Insurance Market Insights

Our Global Insurance Market Insights highlight insurance market trends across pricing, capacity, underwriting, limits, deductibles and coverages.

Regional Results

How do the top risks on business leaders’ minds differ by region and how can these risks be mitigated? Explore the regional results to learn more.

Human Capital Analytics

Our Human Capital Analytics collection gives you access to the latest insights from Aon's human capital team. Contact us to learn how Aon’s analytics capabilities helps organizations make better workforce decisions.

Human Capital Quarterly Insights Briefs

Read our collection of human capital articles that explore in depth hot topics for HR and risk professionals, including using data and analytics to measure total rewards programs, how HR and finance can better partner and the impact AI will have on the workforce.

Insights for HR

Explore our hand-picked insights for human resources professionals.

Workforce

Our Workforce Collection provides access to the latest insights from Aon’s Human Capital team on topics ranging from health and benefits, retirement and talent practices. You can reach out to our team at any time to learn how we can help address emerging workforce challenges.

Mergers and Acquisitions

Our Mergers and Acquisitions (M&A) collection gives you access to the latest insights from Aon's thought leaders to help dealmakers make better decisions. Explore our latest insights and reach out to the team at any time for assistance with transaction challenges and opportunities.

Natural Resources and Energy Transition

The challenges in adopting renewable energy are changing with technological advancements, increasing market competition and numerous financial support mechanisms. Learn how your organization can benefit from our renewables solutions. 

Navigating Volatility

How do businesses navigate their way through new forms of volatility and make decisions that protect and grow their organizations?

Parametric Insurance

Our Parametric Insurance Collection provides ways your organization can benefit from this simple, straightforward and fast-paying risk transfer solution. Reach out to learn how we can help you make better decisions to manage your catastrophe exposures and near-term volatility.

Pay Transparency and Equity

Our Pay Transparency and Equity collection gives you access to the latest insights from Aon's human capital team on topics ranging from pay equity to diversity, equity and inclusion. Contact us to learn how we can help your organization address these issues.

Property Risk Management

Forecasters are predicting an extremely active 2024 Atlantic hurricane season. Take measures to build resilience to mitigate risk for hurricane-prone properties.

Technology

Our Technology Collection provides access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities of technology. Reach out to the team to learn how we can help you use technology to make better decisions for the future.

Top 10 Global Risks

Trade, technology, weather and workforce stability are the central forces in today’s risk landscape.

Trade

Our Trade Collection gives you access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities for international business. Reach out to our team to understand how to make better decisions around macro trends and why they matter to businesses.

Transaction Solutions Global Claims Study

Better Decisions Across Interconnected Risk and People Issues.

Weather

With a changing climate, organizations in all sectors will need to protect their people and physical assets, reduce their carbon footprint, and invest in new solutions to thrive. Our Weather Collection provides you with critical insights to be prepared.

Workforce Resilience

Our Workforce Resilience collection gives you access to the latest insights from Aon's Human Capital team. You can reach out to the team at any time for questions about how we can assess gaps and help build a more resilience workforce.

More Like This

View All
View All
Subscribe CTA Banner