Political risk - market insights Q3/Q4 2024

Russia's invasion of Ukraine

We are continuing to see a significant number of claims involving investments in both Russia and Ukraine. Global sanctions are continuing to expand in an attempt to restrict Russia’s ability to fund its ongoing war against Ukraine. In the UK, new provisions are attempting to capture services and trade to third countries, which are currently outside the sanction regime. 

The Middle East

Tensions in the Middle East continue to escalate. The conflict between Israel and Hamas shows no sign of resolution, and the escalation of recent events in Lebanon has led to a larger scale conflict. Due to the ongoing hostilities, war damage claims will continue to rise.

Global instability

Global election results in 2024 have already seen shifts in policy focus for many countries. With the EU economy currently smaller than pre-2020 growth trends, this political and economic instability will continue drive emigration and civil unrest. With more elections still to come, not least the US presidential election in November, we anticipate a continued rise in geopolitical instability and instances of civil unrest.

The escalations of tensions in the Middle East mean that there remains a genuine risk of further destabilisation of Lebanon and beyond.

Tensions between China and Taiwan continue to simmer. The global sanctions imposed against Russia may serve as evidence of the potential trade risks involved, potentially reducing the appetite of imminent action. However, the South China Sea does remain a significant potential flashpoint and ongoing clashes could lead to an escalation of tensions.