From Middle East unrest to global trade volatility, today’s geopolitical environment is anything but stable. While these developments dominate headlines and rattle stock markets, their implications for Canada’s insurance sector are subtler – yet no less significant.
According to Marc Major (pictured), global placement leader for Canada at Marsh, global conflict may not yet be triggering dramatic rate changes or immediate claims in the Canadian insurance market. But the ripple effects are making their way through client operations, underwriting assessments, and long-term strategic planning.
Insurance is not always immediately impacted by the headline-grabbing effects, but it’s paramount to keep an eye on the major shifts in the world economy, Major said.
If your client’s supply chain is disrupted by sanctions or tariffs, or if geopolitical risk changes how they trade, source, or operate globally, then yes – insurance exposure shifts too. “All of that has an impact on the spending an on insurance,” Major told Insurance Business.
Canadian companies with international dependencies are facing increased uncertainty, especially around shipping routes, supplier reliability, and market access. These fluctuations affect everything from revenue projections to physical asset values – both of which form the basis of risk evaluation for insurers.
The impact isn’t always immediate, Major emphasized, but becomes apparent over time, especially at renewal when underwriters reassess shifting exposures.
The conversation around geopolitical disruption comes as the insurance industry continues to process years of upheaval – from pandemic-driven business interruption to climate catastrophes. Now, a new layer of complexity is being added: international volatility.
“Organizations have long accepted a certain level of unknowns in their supply chain as just part of doing business,” Kotwinski said. “But what we’re seeing now is that with added trade tensions and geopolitical unpredictability, we’ve inserted yet another layer of opacity into what was already a complex matrix.”
Major explained that this increasingly fluid risk environment may not always result in hardening markets, especially in lines where Canadian risks remain domestic or relatively predictable.
However, when it comes to businesses with significant exposure to international trade – especially those importing materials or distributing goods globally – insurers are beginning to pay closer attention.
While premiums in core commercial lines have been softening overall, Major acknowledged that outliers exist. Risks that include significant US liability exposure or are tied to volatile sectors like transportation, heavy manufacturing, or agriculture may see stricter underwriting or increased retentions.
Particularly worrying, he said, are “nuclear verdicts” in US litigation and broader international regulatory changes, which can reshape loss expectations.
With global disruption raising the stakes, Kotwinski said that insurers are looking more closely at how well-prepared organizations are to handle uncertainty.
This, he said, is where companies can take proactive steps to strengthen their insurance positioning – even in a volatile environment.
One step is identifying alternative suppliers. As Kotwinski explained, a key risk-management priority for businesses should be reducing dependency on vulnerable links in the supply chain. This helps avoid unexpected exposure to foreign conflict, regulatory shifts, or logistics bottlenecks.
But more than just reactive planning, Kotwinski said, insurers are rewarding companies that can clearly quantify the risks they face and demonstrate how they’re addressing them. That may involve not only supply chain diversification, but also robust internal planning, clear crisis protocols, and scenario testing that proves a business can remain resilient even amid disruption.
Insurers, he noted, don’t just underwrite policies – they evaluate how their clients might respond to loss events. Underwriters are increasingly looking to partner with organizations that can show a deep understanding of their risk landscape and a track record of meaningful mitigation.
Providing brokers and insurers with concrete data – such as exposure modeling, scenario analysis, and continuity planning – allows insurers to tailor coverage based on the actual risk rather than generic assumptions. In today’s market, that can mean the difference between predictable renewals and expensive surprises.
“We can confidently say that those that have done the quantification of both the risk impacts and mitigation steps will be better positioned within today and tomorrow's marketplace,” he said.
