Flexible insurance key to navigating geopolitical and transport risks in Middle East: Aon

Businesses operating in the Middle East face a critical time, as rapidly evolving geopolitical and economic dynamics in the region demand an urgent evaluation of their risk strategies, Aon analysts have stated in a recent report.

Businesses must therefore be prepared for rapid and extreme scenarios, which they can achieve through flexible insurance operational oversight and contingency planning to ensure resilience and real-time responsiveness, as Aon highlighted.

Jord Oostrom, Chief Commercial Officer, Middle East, said: “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.”

He added: “However, in an environment where risk boundaries can shift overnight, purchasing insurance coverage may not be enough — its ongoing adequacy must be assessed.”

Given the persistent geopolitical volatility in the region, flexible insurance approaches are essential, especially for marine, cargo, and political risk coverage. To maintain business operations amidst instability, these strategies must be adaptable and regularly revised for key locations, the report stated.

Aon also advised that 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.

Additionally, collaboration among various stakeholders is vital for coordinated responses to potential disruptions, the report noted. This includes rapid response times, real-time information sharing and role clarity between all parties — including insurers, brokers, risk engineers and operational teams,

Oostrom stated: “Companies must act across three parallel dimensions:

• Continuously identifying and monitoring geo-risks — including alternative routes and logistical exposure;
• Ensuring insurance structural flexibility by separating marine and war risks, adjusting limits, and enabling extensions;
• Leveraging real-time intelligence and close broker support to make responsive decisions 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.”

In its report, Aon shared a number of key operational recommendations for managing supply chain risk. These include strategically evaluating insurance to close insurance-exposure gaps with flexible risk programs, boosting cargo and construction coverage via inland war extensions, throughput policies, DSU cover, and alternative transfers.

Aon also recommends businesses to improve end-to-end supply chain visibility by mapping out second- and third-tier suppliers—to uncover vulnerabilities, implement layered loss prevention strategies, review contractual liabilities, define operational risk KPIs, and assign control points with dedicated leads across the supply chain.

Additionally, integrating advanced technologies – backed by strong cybersecurity – will help ensure real-time supply chain visibility, cargo tracking, and product integrity, while monitoring
compliance, assessing partner risk, and deploying corrective actions.

Risk mitigation measures will be achieved by leveraging relationships with insurers and certified international loss adjusters to support claims advocacy, the broker also advised, while implementing and regularly auditing compliance processes that uphold loss prevention and risk mitigation to protect supply chain integrity.

This website states: The content on this site is sourced from the internet. If there is any infringement, please contact us and we will handle it promptly.