Aon, the global professional services firm specialising in risk, retirement and health solutions, has outlined how the ongoing conflict in the Middle East is continuing to affect insurance markets, supply chains, political risk and workforce planning for businesses operating internationally.
During a webinar hosted by Aon on the 7th May titled Middle East Conflict: Key Developments and Practical Considerations, the company’s specialists discussed how organisations are adapting to heightened uncertainty and changing market conditions.
Joe Peiser, CEO of Risk Capital for Aon, said businesses are now operating in an environment where instability has become a permanent feature rather than an occasional disruption.
“Risk has shifted decisively from being event driven to condition driven. Volatility is no longer a tail risk that leaders plan around occasionally — it is now a baseline planning assumption, even in moments when the news feels quieter. Even if the conflict deescalates, organisations will continue to operate with higher uncertainty, higher costs of disruption and tighter margins for error.”
Aon’s Richard Waterer, Global Risk Consulting Leader, said the effects of geopolitical instability are already being felt through global supply chains and rising costs, with concentrated operations creating additional vulnerabilities.
“Globally we have seen it show up first in supply chains and costs. Delivery reliability declines, costs rise and some options become harder to use. The greatest fragility comes from concentration. That could be a single route, supplier, site or decision maker.”
Ali Raza, Aon’s Risk Consulting Practice Leader for the Middle East, said regional uncertainty tends to affect logistics and transportation before creating wider physical supply shortages.
“In the Middle East context, uncertainty translates fastest into route reliability, transport cost and feasibility. Corridor behavior and risk constraints can change quickly, which affects deliveries and margins before physical supply is interrupted. It usually hits first in service levels, margins and cash.”
From a workforce perspective, Aon highlighted how geopolitical tensions are increasingly becoming a people and operational risk issue for employers. Paul Zoghbi, Head of Talent Solutions, Middle East, for Aon, said organisations are recognising that workforce exposure can quickly escalate into broader business disruption.
“When geopolitical risk escalates, workforce exposure is often the first risk to crystallise and the fastest to cascade into operational impact. For senior leaders, the key shift is to recognise that people risk is no longer a second order HR issue. It is an operational, reputational and insurable risk.”
Aon also noted that insurers are becoming more selective in how they deploy capacity across the region. Cynthia Beveridge, Chief Broking Officer for Commercial Risk at Aon, said insurer behaviour is changing ahead of any direct loss activity.
“What changes first is underwriter behaviour, not pricing tables. Capacity may still be there, but it becomes more selective. Underwriters start asking sharper questions about exposure concentration, governance and preparedness. Markets recalibrate in anticipation of risk, not in response to loss data alone.”
Tony Day, Crisis Management Leader for Aon, added that insurers are reassessing how much exposure they are willing to hold within the Middle East market. “The biggest change is that insurers are having to fundamentally re-engineer their line size management within the Middle East. As a result, we are seeing much lower capacity being deployed, making expiring limits extremely difficult to replicate for many businesses.”
According to Aon’s transportation and logistics specialists, cargo risks are also receiving closer scrutiny from underwriters as disruption concerns grow.
Phil Smaje, Global Industry Specialty Leader for Transportation and Logistics at Aon, added: “Cargo is increasingly exposed to delay, accumulation and handling risk, even where loss experience hasn’t yet materialised. Underwriters are paying closer attention to values in transit, dwell times at ports or temporary facilities and aggregation that wasn’t previously visible.”
Aon’s Andrew Green, Global Claims Leader, also added that businesses should also expect insurers to place greater emphasis on documentation and governance during the claims process. “On claims, insurers increasingly expect contemporaneous records — decision logs, security assessments, workforce actions. Governance documentation is no longer theoretical; it is evidentiary. This reinforces why crisis playbooks and escalation frameworks matter beyond operations — they directly support claims outcomes.”
