Economic Policy Risks Eclipse Conflict Concerns in WTW’s Latest Survey

Key Takeaways

• 61% view tariffs as hardest political risk to manage
• 61% report negative financial impact from tariffs
• 84% preparing for split Eastern/Western economic systems
• Political risk insurance losses exceed $250 million for third year
• 65% cite infrastructure attacks as top grey‑zone threat

Pulse Analysis

The latest Willis Political Risk Survey underscores a fundamental reorientation of corporate risk perception away from conventional war‑zone threats toward the volatility of economic policy. While headlines remain dominated by the Middle East conflict, 61 % of surveyed executives rank escalating tariffs as the most challenging political risk, and an equal share report direct financial losses. This trend reflects a broader anxiety about contested trade, technology, and information systems that shape global supply chains. As governments wield tariffs and sanctions as strategic tools, firms are forced to navigate a more fragmented and unpredictable commercial landscape.

From an insurance perspective, the survey highlights a sharp uptick in demand for political risk and trade credit coverage. For the third consecutive year, related claims have exceeded $250 million, the second‑highest total in the survey’s nine‑year history, indicating that policy‑driven disruptions are translating into tangible losses. Insurers are therefore expanding capacity and product innovation to address grey‑zone aggression, such as sanctions and export controls. The 84 % of companies preparing for a bifurcated Eastern‑Western economic order further fuels the need for bespoke risk‑transfer solutions that can bridge divergent regulatory regimes.

Corporations responding to these findings are adopting a more proactive stance. Preparing for separate Eastern and Western economic systems involves diversifying supply chains, investing in resilient infrastructure, and securing political risk insurance that covers both tariff‑related and grey‑zone threats like undersea cable attacks, which 65 % of respondents identify as a top concern. Executives are also enhancing internal monitoring of policy developments and engaging in scenario planning to mitigate exposure. By aligning risk‑management frameworks with the evolving geopolitical reality, firms can protect earnings, maintain market access, and sustain growth amid an increasingly unstable world order.