The global political risk insurance (PRI) market is set for continued expansion as demand accelerates and insurers adapt to new, more complex forms of government action. That’s according to Patrick Rengger, commercial account executive and senior advisor at HUB International’s complex risk division, who expects both capacity and innovation in the sector to keep rising into 2026 and beyond.
“Capacity is increasing because demand is increasing,” Rengger told Insurance Business. “There are attempts to innovate, to expand elements of coverage,” he added.
Rengger said the upward trajectory of the political risk market reflects a fundamental shift in how companies perceive geopolitical exposure. The surge in global instability – from trade restrictions to government contract interference – has pushed more organizations to seek protection.
Insurers, in turn, are evolving their products to match that demand. Beyond traditional triggers such as expropriation or nationalization, policies are being expanded to address newer forms of interference, including contract frustration, denial of justice, and arbitral award default.
“Political violence is pretty black and white,” he said. “But we’re seeing various forms of political action that are beyond what has typically been seen, yet are clearly within the realm of political risk.”
As these exposures broaden, insurers are refining policy language and creating new endorsements to respond to “grey zone” losses that fall short of outright seizure but still deprive companies of value.
Global capacity for political risk coverage has grown steadily over the past several years, supported by strong demand from investors, lenders, and corporates operating across emerging and mid-tier markets.
Rengger expects that trend to continue as long as buyers remain willing to pay for protection. “Capacity has been increasing for a number of years and continues to increase because there is a demand and people are willing to pay for it,” he said.
However, he cautioned that expansion is not uniform. Insurers remain careful about concentration limits in certain countries or sectors.
“Insurers don’t want to be overexposed to one particular type of risk or jurisdiction,” he said. “They might feel they already have an awful lot of exposure to Country X and decide that’s enough. The risk hasn’t changed, but they’re good for now.”
That country-specific capacity management can tighten availability even as the overall market grows. Shifts in government, election outcomes, or macroeconomic conditions can all trigger a reassessment of risk appetite.
Rengger said the continuing evolution of the market demonstrates how political risk has moved from a niche specialty to a mainstream risk-management tool. Companies are increasingly aware that political interference can take many forms – from arbitrary contract changes to currency controls – and insurers are adjusting accordingly.
He expects this gradual maturation to continue into 2026, with steady capital inflows and more refined definitions of covered events. The challenge for underwriters, he added, will be keeping pace with the rapid transformation of political behavior.
“We’re seeing an evolution of how coverage is defined and expanded,” Rengger said. “Emerging forms of political action are forcing insurers to adapt.”
As new geopolitical risks emerge and traditional ones resurface, the political risk insurance market appears poised for further growth – though not without careful scrutiny over where, and how, insurers deploy their capacity.
Rengger, who previously spoke with Insurance Business about common misconceptions surrounding political risk insurance, said many companies still underestimate how complex and bespoke these policies are. Unlike property or casualty coverage, political risk insurance is tailored to each client’s contracts, assets, and host-country obligations – a process that can take months.
He added that confidentiality also fuels confusion. Because political risk policies and payouts are rarely publicized, many executives assume claims rarely succeed. “It works quietly,” he said, noting that hundreds of millions of dollars are paid out globally each year.
That lack of visibility, combined with the time needed for due diligence, has slowed adoption among some firms. But as awareness spreads and more organizations confront political instability directly, Rengger expects attitudes to shift. “People are learning it’s not theoretical anymore,” he said. “It’s part of the real world of global business.”
