Rising geopolitical friction, unresolved trade disputes, climate hazards, and post-Brexit regulation are combining into a volatile risk mix that is testing the marine insurance market worldwide, according to Kennedys. “Geopolitics now weighs heavily on underwriting decisions and claims exposure”.
Kennedys point to mounting tension involving Russia, including pressure points near Estonia and other neighbouring states, which is already disrupting the movement of goods and people through new restrictions.
That instability doesn’t stop in Europe. Chatfield and Burton say disruption across Middle Eastern shipping lanes continues to ripple through global trade.
Attacks linked to Houthi forces and broader tension with Iran have created losses and operational strain for marine insurers, leaving routes such as the Red Sea and Arabian Sea exposed and unpredictable.
Vessels increasingly divert around the Cape of Good Hope to avoid these areas. That detour lengthens supply chains, increases transit risk, and raises costs across hull, cargo, and liability lines.
Trade friction between China and the US adds another layer. Kennedys point to the first tariff imposed by China on a US vessel as a signal that retaliation could escalate.
Such moves risk disrupting supply chains, forcing shifts in sourcing and routing, and further destabilising the China–US trade relationship.
Proposals to extend EU powers to board Russian vessels could trigger reciprocal seizures and inspections. That scenario would increase uncertainty for shipowners, charterers, and insurers alike.
As sanctions regimes tighten, Kennedys says insurers will need sharper scrutiny of insured risks and any financial benefits flowing to parties caught up in trade or geopolitical disputes. Compliance checks, already demanding, get tougher under these conditions.
Climate risk remains a constant threat running beneath everything else. The partners say insurers still lean too heavily on historical loss data, which struggles to capture the pace and severity of current climate-driven events.
They point to more frequent floods in the Middle East and persistently warm ocean temperatures as drivers of rising claims from floods and hurricanes. A recent lull in activity shouldn’t reassure anyone. Hurricane activity in the Caribbean is already picking up again.
Closer to home, post-Brexit customs rules are feeding a steady stream of claims. Kennedys say freight liability policies are seeing more losses tied to border delays, incorrect declarations, and fines, roughly two years after the new regime took effect.
Lawmakers describe the return of complex customs procedures, echoing older T-form systems, as a niche issue with real financial bite. HMRC has begun issuing substantial penalties to freight operators and importers, catching a market used to a unified EU customs framework.
The result, they say, is pressure on freight liability cover. Insurers will need to revisit policy terms and tighten how customs-related risks are handled, as these claims become harder to ignore in a trade corridor that still moves huge volumes between the UK and EU.