As geopolitical uncertainty intensifies, businesses and governments are increasingly seeking protection against political violence and credit risks, according to insights from Westfield Specialty. Jeremy Shallow, deputy chief underwriting officer and head of specialty, predicts that 2025 will be a defining year for these markets as global events reshape risk landscapes.
The transition to a new Trump presidency has introduced uncertainty into international diplomacy. Known for its unconventional negotiation style, the new administration is expected to create a challenging environment for global stability. Shallow noted that efforts to resolve the Russia-Ukrainian conflict may generate cautious optimism but carry significant risks, as any missteps could spark further instability.
In Russia, internal pressures pose the possibility of political unrest, with potential ripple effects across neighbouring regions. Meanwhile, conflicts in areas like Georgia, Syria, and New Caledonia highlight the need for businesses operating in high-risk zones to consider political violence policies.
Shallow highlighted insurance solutions tailored to such uncertainties can help protect operations and assets against abrupt disruptions, particularly as civil unrest continues to challenge supply chains. He also noted the potential recovery of Ukraine’s insurance market if enduring peace is achieved, spurred by Western capital investment in reconstruction and infrastructure.
“In 2025, keeping on your toes as the world evolves, alongside disciplined underwriting, will be critical to navigating these challenges while capturing emerging opportunities in a high-demand, high-risk market,” Shallow said.
Mark Fellows, head of financial and professional lines at Westfield Specialty, suggested that while the financial lines market may remain soft through much of 2025, certain factors could drive change by year-end. An anticipated uptick in mergers and acquisitions (M&A) could increase demand for financial lines coverage.
Persistent political instability in major economies like France, Germany, and South Korea, coupled with potential trade wars sparked by US tariffs, could reignite macroeconomic volatility. These developments may result in inflationary pressures and rising interest rates, which would elevate insurance pricing and claims risks.
“While we will continue to see a huge amount of uncertainty around a number of factors, one thing is sure: broker facilities will continue to expand and overcapacity will remain a key feature of the market in the coming 12 months,” Fellows said. “However, while the global economic landscape has been stabilising, this could very easily be reversed.”
The property insurance market is showing signs of stabilisation, bolstered by better capitalisation and a stronger understanding of pricing adequacy. Richard Wood, head of property at Westfield Specialty, highlighted the importance of maintaining disciplined underwriting to sustain this progress, even as clients push for rate relief.
In the casualty market, Ross MacDonald, head of general liability, identified increased competition, advanced data processing, and a growing focus on US exposures as key trends for 2025. Broker facilitation—pooling risks among multiple insurers—also plays a vital role in mitigating large losses and ensuring sustainability in the market.
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