The ongoing US-Iran conflict is becoming a big driver of currently heightened terrorism risks that can blur the line between direct acts of terrorism and civil unrest. The latest 2026 Global Terrorism Risk Insurance Report by Marsh found that these increasingly complex risks have shifted from property-focused assaults to dispersed networks employing tactics including political violence, cyberattacks and even the threat of biological and chemical attacks. For brokers this heightens the need to be clear at renewal what’s actually covered and to encourage global clients to think about broader, layered coverage.
“The world we’re in now is pretty complex,” said Tony Gallagher (pictured), CEO Asia-Pacific for Guy Carpenter, the reinsurance business of Marsh McLennan.
According to some data, it’s also more violent. Another Marsh study, the 2026 political conflict report, found a doubling of the number of conflicts worldwide since 2005.
So in Gallagher’s view, the market can no longer treat terrorism as a narrow, standalone peril defined only by large-scale property attacks. Today’s threat picture stretches from state-sponsored sabotage and lone-actor violence to cyber terrorism, attacks on communal spaces and the wider business interruption that follows. These incidents are often linked to geopolitical tensions and are evidence that global instability quickly changes the risk temperature.
For example, in the UK this week, four Jewish charity‑owned ambulances were set on fire in north London, in an incident being treated as a serious hate crime. In Australia, there have been attacks on mosques and synagogues, such as the Adass Israel synagogue firebombing in Melbourne in 2024, and more recently a mass shooting at a Hanukkah event on Sydney’s Bondi Beach. Events like these, said Gallagher, underline the human and commercial toll from politically motivated violence and acts of terror.
Many brokers are now grappling with not just whether clients buy terrorism cover but whether they really understand the boundaries between terrorism, sabotage, political violence, cyber and business interruption extensions. Gallagher’s first practical message to brokers is around education.
“At renewal, brokers should be clear about what’s covered - especially with emerging risks like state-sponsored terrorism and cyber terrorism - and encourage clients to think about broader, layered coverage,” he said.
That goes to one of the biggest recurring problems: insureds often assume cover is broader, or simpler, than it really is when a loss occurs.
“The biggest gaps usually come down to misunderstandings about what’s actually covered,” said Gallagher.
For globally exposed clients, the job now is to map where exposures sit rather than rely on old labels. Critical infrastructure remains exposed but so do softer targets such as workplaces, communal spaces and religious sites. Add cyber-triggered disruption and the conversation moves well beyond physical damage into operational paralysis, supply chain interruption and reputational fallout.
As Chris Kirby, program president at Starwind, told IB, “Clients began demanding strikes, riots and civil commotion (SRCC) coverage alongside terrorism policies.”
In 2025, a WTW crisis management market review said there was limited appetite for terrorism-only cover in highly volatile areas because insurers prefer to offer broader political violence protection, while new entrants have also brought some pricing relief to terrorism and political violence risks.
“The political violence and terrorism (PVT) market has experienced a significant shift in rates, risks, and exclusionary language,” said Chloe Gordge, head of war and terrorism at Markel in an industry report. Gallagher said the best way forward for brokers and global clients is to build a layered insurance program.
“Combine traditional terrorism coverage with alternative markets, building in political violence, cyber terrorism, and business interruption protections,” he said.
Government terrorism pools and public-private backstops are also “absolutely critical,” said Gallagher.
He said schemes such as the US Terrorism Risk Insurance Program Reauthorization Act (TRIPRA), the Pool Reinsurance Company Limited (Pool Re) in the UK and the Australian Reinsurance Pool Corporation (ARPC) give the market the depth private capital alone cannot provide. These can absorb peak losses and keep cover available and affordable when threats become more systemic, ambiguous and politically charged.
WTW’s Terrorism Pool Index 2025, produced with the International Forum of Terrorism Risk (Re)Insurance Pools (IFTRIP), said insurers in highly volatile territories have little appetite for terrorism‑only policies and increasingly prefer to offer broader political violence cover instead, to avoid grey‑area coverage disputes.
Terrorism pools are evolving to respond to chemical, biological, radiological, nuclear and cyber-related threats, while some are also exploring alternative capital. WTW’s latest pool review also notes a rising need to quantify losses from strikes, riots and civil commotion and to use more dynamic, data-driven models to assess civil unrest risk.
Brokers with global books are advised to deepen their risk assessments: understand how geopolitical change, cyber threats and new attack methods alter each client’s exposure. When it is feasible, experts advise structured layered programmes that bring together terrorism, political violence, cyber terrorism and business interruption protection, supported where possible by pool capacity and backstops.
The current challenge is not simply that terrorism risk is rising but that the peril itself is being redefined in real time. In that environment, the broker who can translate blurred threats into clear cover may be the one who delivers the most value.
