The rising conflict between the US and Iran is pushing up terrorism risks, making it harder to tell the difference between acts of terror and civil unrest. A new report from Marsh reveals that attacks are no longer just about damaging property. Instead, they involve more varied and unpredictable threats like political violence, cyberattacks, and even the possibility of biological or chemical weapons. This shift means insurance brokers need to be clearer with clients about what their coverage includes and suggest broader protection options.
Tony Gallagher, CEO for Guy Carpenter in Asia-Pacific, says the world today is full of different threats. Data shows that conflicts worldwide have doubled since 2005, making terrorism a much broader issue. Gallagher explains that terrorism now covers everything from state-backed sabotage to lone attackers, cyber terrorism, and violence in public spaces. These threats often come from political tensions that can quickly change the risk landscape.
Recent examples highlight how dangerous this new reality is. In the UK, four ambulances owned by Jewish charities were set on fire in north London. Australia has also seen attacks on places of worship, like the synagogue firebombing in Melbourne in 2024 and a mass shooting during a Hanukkah event in Sydney. Incidents like these show the real human impact and financial damage of political violence and terrorism.
Because the dangers have grown, brokers are urging clients to look closely at their policies when it’s time to renew. Gallagher stresses the need for education about the differences between terrorism, sabotage, political violence, cyber threats, and related business interruptions. Often, people assume their insurance covers more than it really does, leading to gaps when damage happens.
For companies with risks in many countries, it’s important to pinpoint where those risks lie now instead of relying on old definitions. Critical infrastructure is still a target, but so are workplaces, religious sites, and other soft targets. With cyber attacks causing operational shutdowns and supply chain issues, insurance conversations must cover much more than physical damage.
Chris Kirby, a program president at Starwind, notes that many clients now want coverage for strikes, riots, and civil unrest alongside traditional terrorism policies. In volatile regions, insurers often avoid terrorism-only coverage, preferring broader political violence insurance to prevent coverage disputes.
Chloe Gordge from Markel points out that the market for political violence and terrorism insurance is changing fast, with shifts in pricing, risks, and policy language. Gallagher suggests brokers and clients build layered insurance plans that combine traditional terrorism coverage with protections for political violence, cyber terrorism, and business interruption.
Government-backed terrorism pools also play a big role. Programs like the US Terrorism Risk Insurance Program Reauthorization Act (TRIPRA), the UK’s Pool Re, and Australia’s Reinsurance Pool Corporation (ARPC) provide support that private insurers alone can’t. These pools help absorb big losses and keep coverage affordable when threats are higher.
WTW’s latest reviews on terrorism pools show insurers prefer broader political violence coverage in unstable regions and that pools are evolving to address new threats like chemical, biological, radiological, nuclear, and cyber attacks. They also highlight the need for better models to measure risks linked to strikes and civil unrest.
Experts advise brokers with international clients to take a detailed look at each client’s exposure, considering the changing political and cyber threat landscape. Combining different types of coverage with support from pools offers the best protection against today’s wide-ranging and fast-changing risks.
In short, terrorism risks are rising and changing so rapidly that having clear and comprehensive insurance coverage is more important than ever. Brokers who can explain these blurred threats clearly are the ones who will provide the most value to their clients.