Geopolitical risk is no longer a background variable in marine underwriting. It is shaping trading decisions before they happen, pulling insurers directly into the commercial frontline.
Shipowners are increasingly seeking guidance from protection and indemnity (P&I) clubs before agreeing trades or fixing vessels, reflecting a step-change in how liability exposure is assessed across global shipping.
“We are talking to our ship owners much more frequently,” said Reto Toggwiler (pictured), chief underwriting officer at London P&I Club. “Before, we were always engaged if there was a problem with a claim. Now it becomes a question of what they should be considering before they arrange trades.”
That shift is pulling insurers closer to commercial decision-making, where underwriting input is influencing whether trades proceed at all, rather than simply responding when issues arise.
The shift is not about new risks emerging, but about the frequency, overlap and immediacy of existing pressures, from sanctions regimes to active conflict zones, forcing earlier and more continuous involvement.
This is moving liability exposure upstream, turning what was once a claims-driven issue into a pre-trade risk and compliance decision.
“There are always geopolitical issues somewhere,” Toggwiler said. “But it’s becoming maybe more frequent. It’s just become part of the trading landscape now.”
That shift is particularly visible in sanctions compliance, where restrictions are increasingly shaping how trades are structured and who shipowners can do business with.
“I don’t think there’s ever been a time where there have been so many sanctions in place at one time,” he said. “Navigating through that web is quite complicated.”
For shipowners, that means liability exposure is no longer confined to claims scenarios, but increasingly tied to who they trade with, where vessels call, and how contracts are structured before a voyage begins.
For P&I clubs, this has meant expanding compliance capabilities while drawing on global correspondent networks to provide real-time intelligence on changing conditions.
At the same time, physical disruption to shipping routes is reinforcing the need for earlier risk assessment. Disruptions in the Red Sea and the Strait of Hormuz are increasing voyage length and operational exposure.
“A recent example is the attacks by the Houthis on transits through the Red Sea. That caused a lot of container operators to reroute their sailings around the southern coast of Africa,” Toggwiler said.
While policies typically accommodate such deviations, the impact is clear: geopolitical events are now dictating day-to-day trading behaviour, not just exceptional losses.
“If they are avoiding certain areas because they’re dangerous, then that is advantageous to all parties concerned,” he added.
Heightened focus on conflict exposure does not represent a new underwriting challenge, but it does reflect a more volatile environment. War risk has long formed part of marine cover, with exposure levels rising and falling alongside global events, from Somali piracy to the Russia-Ukraine conflict and current tensions affecting key trade corridors.
“Ship owners always have to buy war risks cover for trading,” Toggwiler said. “It’s just become more of an issue at the moment because there’s a live situation.”
What has changed is the scale and simultaneity of disruption, with multiple geopolitical pressures influencing trade flows at once. The implication for the market is clear: geopolitical risk is no longer an exception. It is embedded in routine underwriting and operational decision-making.
“We’re well resourced and geared up to provide that support,” Toggwiler said.
The role is shifting decisively from back-end protection to front-end risk gatekeeping, where underwriting influence can shape whether a voyage proceeds, not just how a loss is handled.
