Reinsurers are well aware of some of the most obvious geopolitical risks, such as the Russia–Ukraine war, that are impacting business more broadly, and insurance and reinsurance in particular.

However, these risks are far from static. Political tensions, economic instability and even climate change can interact and lead to emerging geopolitical risks.

A great example of this has been highlighted by Swiss Re. An emerging risk it calls the “Arctic opening” is an environmental risk that could have geopolitical implications. With the Arctic region experiencing accelerated warming, the ice is melting and new shipping routes are opening up.

But with this economic activity comes the growing potential for environmental exposure and geopolitical frictions, Swiss Re observes in its recently released SONAR 2023 report on emerging global risks.

“Co-operation among the eight member states of the Arctic Council has been suspended, fostering governance, regulatory and legal uncertainties,” says the report.

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