The risk to vessels, undersea cables, and offshore oil installations is growing primarily due to the availability of advanced weapons and the willingness of certain states, notably Russia and Iran, to disregard international maritime laws, according to global re/insurance broker WTW.
In WTW’s Political Risk Index for H2’24, the firm highlighted the expanding threat of ‘grey zone aggression’, hostile activities that fall short of outright war, as a major risk to global commerce or infrastructure.
WTW’s report identified vulnerabilities in the marine and aerospace sectors, pinpointing attention towards incidents such as undersea cable sabotage, unauthorised oil exports via shadow fleets, as well as attacks on GPS systems.
In fact, these sectors are increasingly targeted through grey zone activities, such as cyber-attacks and the destruction of key infrastructure.
One key trend identified by WTW is the expansion of the global shadow fleet used to export oil. The broker’s report notes that these vessels often lack proper insurance, navigation, navigation compliance and maintenance, which therefore makes them both a safety risk and a potential enabler of unlawful activities.
It’s worth highlighting that such actions aggravate supply chain disruptions, which according to WTW’s report affected 69% of respondents globally this year.
Meanwhile, Jared Seth, Managing Director, Global Aviation and Space, WTW, notes that the aviation sector is increasingly experiencing grey zone attacks of its own, including GPS jamming and spoofing, stating that insurance relies on precise language, which ultimately means that the implications of ambiguous grey zone activities can be challenging.
Samuel Wilkin, director of political risk analytics, WTW, commented: “Without insurance, many ships will not sail and planes will not fly, so improving our understanding of gray zone risks is vital for the protection of people and assets and the health of global commerce.
“These attacks appear to have soared in recent years, for many reasons. One reason is that countries that are deeply interconnected by globalisation increasingly find themselves in adversarial relationships, and these deep interconnections offer many avenues for gray zone action, especially actions directed at globalised businesses.
“Another reason is that new technologies have enabled gray zone actions, including cyber-attacks and remote attacks by drones. Hybrid warfare is likely to continue to rise and evolve, so insurers need to be able to understand the implications of ambiguous gray zone activities to properly assess risk.”
