Aon, a global professional services firm specializing in risk, retirement and health solutions, outlines how ongoing conflict in the Middle East continues to impact insurance markets, supply chains, political risk and workforce planning for businesses operating internationally.
In a May 7 webinar hosted by Aon titled Middle East Conflict: Key Developments and Practical Considerationsthe company’s experts discuss how organizations can adapt to high levels of uncertainty and changing market conditions.
Joe Peiser, chief executive of Aon Venture Capital, said companies are now operating in an environment where instability has become a permanent feature rather than an occasional disruption.
“Risk has shifted from event-driven to conditions-driven. Volatility is no longer a tail risk that leaders occasionally plan for, it has now become a baseline planning assumption even in moments of calmer news. Even as conflict escalates, organizations will continue to operate with higher uncertainty, higher disruption costs, and less room for error.”
Richard Waterer, head of global risk consulting at Aon, said global supply chains are already feeling the impact of geopolitical instability, with costs rising and centralized operations creating additional vulnerabilities.
“Globally, we see it showing up first in supply chains and costs. Delivery reliability goes down, costs go up and some options become harder to use. The biggest vulnerability comes from concentration. That could be a single route, supplier, location or decision maker.”
Ali Raza, head of Aon’s Middle East risk advisory practice, said regional uncertainty often affects logistics and transportation, which then creates wider physical supply shortages.
“In the Middle East, uncertainty translates most quickly into route reliability, transport costs and feasibility. Corridor behavior and risk constraints can change rapidly, impacting deliveries and profits before physical supply is disrupted. It often affects service levels, profits and cash first.”
From a workforce perspective, Aon highlights how geopolitical tensions are increasingly becoming a people and operational risk issue for employers. Paul Zoghbi, head of talent solutions for the Middle East at Aon, said organizations are recognizing that workforce exposure can quickly escalate into wider business disruption.
“When geopolitical risks escalate, workforce risk is often the first risk to materialize and the fastest to have an operational impact. The key shift for senior leaders is recognizing that people risk is no longer a second-order HR issue. It is an operational, reputational and insurable risk.”
Aon also noted that insurers have become more selective in how they deploy capacity across the region. Cynthia Beveridge, chief brokerage officer for commercial risk at Aon, said insurer behavior was changing ahead of any direct loss activity.
“The first thing to change is underwriter behavior, not pricing schedules. Underwriting capacity may still be there, but it is becoming more selective. Underwriters are starting to ask tougher questions about risk concentrations, governance and preparedness. Markets are recalibrating based on risk expectations rather than just reacting to loss data.”
Tony Day, head of crisis management at Aon, added that insurers are reassessing how much risk they are willing to hold in Middle East markets. “The biggest change is that insurers have had to fundamentally redesign their product line scale management in the Middle East. As a result, we are seeing significantly less capacity deployed, making it difficult for many businesses to replicate limits that are about to expire.”
Aon transportation and logistics experts said underwriters are also conducting greater scrutiny of freight risks as concerns about disruptions grow.
Phil Smaje, global industry specialty leader for Aon Transportation and Logistics, added: “Cargo is increasingly exposed to delays, build-up and handling risks, even if loss experiences are not yet a reality. Underwriters are paying more attention to value in transit, dwell time at ports or temporary facilities and previously unseen aggregations.”
Andrew Green, Aon’s global head of claims, added that businesses should also expect insurers to place a greater emphasis on documentation and governance during the claims process. “On the claims side, insurers increasingly expect simultaneous documentation – decision logs, safety assessments, employee actions. Governance documentation is no longer theoretical; it is evidential. This reinforces why crisis manuals and escalation frameworks are more important than operations – they directly support claims outcomes.”
