Insurers and reinsurers have been grappling with how to reflect a higher baseline of geopolitical risk while managing client expectations after several years of tightening terms.
Against that backdrop, Greenland has emerged as a new focal point. Although the Arctic country is an autonomous territory within the Kingdom of Denmark, its strategic location and rich natural resource potential (including rare earths and other critical minerals) have made it more attractive as melting ice opens new maritime routes and extraction opportunities.
Earlier this month, President Donald Trump announced plans to impose escalating tariffs on European allies that oppose US efforts to acquire Greenland, triggering emergency meetings within the European Union.
Under Trump’s proposal, a 10% tariff would take effect from February 1 on goods from a list of European countries, rising to 25% by mid-year unless a “complete and total purchase” of Greenland were agreed.
While primarily a trade dispute on its face, the developments have reinforced concerns about near-term supply chain shocks and the testing of longstanding security alliances. Tariffs, retaliatory measures and diplomatic escalation can all translate into insured losses through contract frustration, project delays, political violence events or supply chain delays.
For Srdjan Todorovic, head of political risk at Allianz Commercial, Greenland remains a highly sensitive topic precisely because nothing tangible has yet occurred.
“We’re opening a whole new can of worms,” Todorovic told Insurance Business.
However, he warned that if rhetoric were ever to harden into action, the implications could extend far beyond the Arctic.
He pointed to a cascade scenario in which a fundamental shift in Greenland’s status could strain or fracture alliances such as NATO, potentially reshaping security dynamics across Europe. In that scenario, Russia could have “free reign” in Eastern Europe and potentially attack the Baltics, Moldova, or even Poland.
Allianz’s latest Risk Barometer highlights political risks and violence as a top global concern for businesses. The 2026 outlook shows that political risk is rising to historically high levels, driven not just by trade disputes like Greenland but also by broader global events including war in Ukraine, Middle Eastern tensions, and protests worldwide.
Reinsurers have also become increasingly vocal about political violence and SRCC risks. In recent commentary, Richard Miller, Howden Re managing director of specialty reinsurance, said: “After several years of sustained geopolitical volatility and structural change, reinforced by elevated loss expectations across the current decade, these risks are increasingly central to how capital is deployed, portfolios are structured and risk is assessed.”
Howden Re also noted that post-renewal developments in Venezuela and mounting concerns around Greenland are already prompting underwriters to reassess regional aggregates and stress-test portfolios against non-linear escalation scenarios. These dynamics are likely to influence mid-year capacity decisions and appetite for large limits in politically sensitive regions.
Official tariff threats, even if currently unenforced or legally unclear, can undermine confidence and disrupt planned investment flows, signalling more volatility for large corporate and multinational businesses. The escalation in rhetoric around Greenland underliens the need for brokers to practice proactive engagement, especially with clients with exposure to Europe, transatlantic trade or Arctic-linked supply chains.
