Welcome to Liga Asuransi— your trusted source for understanding risk management strategies and renewing insurance policies carefully. Global geopolitical tensions have reached a boiling point once again. Since early June 2025, the long-simmering conflict between Israel and Iran has finally erupted to the surface, sparking global fears of a full-scale escalation in the Middle East. On June 21, the United States airstrikes on three Iranian nuclear facilities — including Fordow and Natanz — marked a turning point in the conflict. Although the US President declared a ceasefire at midnight on June 23, many international observers believe the situation remains fragile, with the potential to spread to the Gulf region and beyond.
The impact of this conflict is not only felt politically or militarily, but also directly hit the global economic sector. Crude oil prices have jumped almost 18% in the past two weeks, largely driven by concerns about disruptions to distribution through the Strait of Hormuz — a vital route for more than a quarter of the world’s oil supply. Global stock markets have also been volatile; investors have pulled out of risky assets, and volatility has increased sharply in European and Asian stock markets. International airlines have canceled flights to the Gulf region, while energy and logistics companies have tightened their operations.
In these uncertain times, the insurance industry is at a critical crossroads. Global tensions are no longer just distant foreign issues. They are real factors that affect the costs, terms, and underwriting strategies of your insurance policies. Whether you are in the trading, manufacturing, energy, or even professional services sectors—policy renewals can no longer be viewed as an annual formality, but as part of a highly strategic risk management process.
In this article, we will discuss how international geopolitical tensions directly and indirectly affect the structure and content of your insurance policies. We will also review concrete steps you can take to protect your business in this era of uncertainty.
Understanding Global Tensions
The term “global tension” refers to a geopolitical situation that is heating up, involving major countries and strategic regions of the world, which has a broad impact on economic stability, trade, and international security. This tension can take the form of armed conflict, economic sanctions, trade wars, territorial disputes, and even state-scale cyber attacks.
In 2025, global dynamics are marked by a series of tensions emerging simultaneously in various parts of the world. The latest Israel-Iran crisis is just the tip of the iceberg of a situation that has been worsening for a long time. In other parts of the world, the US-China trade war is heating up again after a wave of retaliatory tariffs were imposed earlier this year. Relations between NATO countries and Russia have not fully recovered from the Ukraine conflict, which still leaves military tensions in the Baltic and Black Sea regions. Meanwhile, Southeast Asia is starting to be affected by new tensions between China and several ASEAN countries regarding the South China Sea.
Such tensions have a domino effect on the global economic ecosystem. Supply chain disruptions, exchange rate fluctuations, energy inflation, and rising logistics costs are visible symptoms of this instability. And, importantly, all of this creates a spike in risk — a buzzword that has become the focus of the insurance industry.
For business people and insurance policyholders in Indonesia, global tensions are no longer something “far away”. Exposure to global risks can come through trading partners, logistics channels, raw material suppliers, and international investments. Therefore, understanding this context is crucial in formulating a policy renewal strategy — not just to fulfill administrative obligations, but as a form of preparedness for rapid and unpredictable world changes.
Impact of Global Tensions on the Insurance Industry
Global tensions have indeed brought about some changes in the way insurance is marketed and renewed. However, these changes are not something to worry about, but rather an opportunity to better understand and tailor protection to current needs.
The insurance industry is one of the most sensitive sectors to global volatility. When risks increase at the macro level—whether due to war, trade conflicts, or energy disruptions—insurers must adjust their strategies across the board. This not only impacts the scope of policies offered, but also affects premium pricing, underwriting capacity, and even the availability of certain products in the market. Here are some real-world examples of this:
- Strait of Hormuz (June 2025)
Geopolitical tensions throughout 2025, especially in the Middle East, have had a real impact on the global insurance market, especially the maritime sector. For example, insurance premiums for ships passing through the Strait of Hormuz have increased significantly. Premiums for ship protection (hull and machinery) have increased from around 0.125% to 0.2% of the ship’s value. This means that a ship worth US$100 million must pay an additional premium of tens of thousands of dollars for each voyage on the route. War risk premiums have also increased, from 0.2-0.3% to around 0.5%, adding to the cost burden for ship owners.
- Tripling War-Risk for Voyage to Israel
The second impact is seen in shipping to Israeli ports, such as Haifa and Ashdod, where war risk premiums have tripled from 0.2% to 0.7–1% of the ship’s value. This reflects the high risk of Houthi attacks and potential military conflict, which has forced insurers to raise rates to cover the risk of greater losses.
- Cyber Insurance Premium Pressure (Q1–Q2 2025)
Meanwhile, the cyber insurance sector is showing a different pattern. In North America, cyber insurance premiums fell by about 7% in the first quarter of 2025, as companies strengthened their security and reduced the risk of incidents. But in the UK, the retail sector saw premiums rise by about 10% due to major cyberattacks on companies such as Marks & Spencer and Tesco. Policies have become stricter with new exclusions and liability limitations to keep risks under control.
These three case studies demonstrate how global geopolitical tensions are significantly affecting the insurance industry, both on the maritime and cyber fronts. The surge in premiums in high-risk routes such as the Strait of Hormuz and Israeli ports, as well as the changing dynamics of cyber insurance premiums across regions, reflect the increased risks that policyholders face. In response, insurers may raise premium rates, tighten underwriting requirements, and adjust policy coverage with new exclusion clauses to manage the potential for large losses. Therefore, policyholders need to understand these changes and work with their brokers to ensure that renewal is the right policy, so that protection remains effective amidst growing global uncertainty.
Immediate Impact on Your Policy Renewal
- Premium Adjustment Based on Actual Risk
When renewing a policy, the insurance company will reassess the risk conditions based on the current global situation. This means that premiums may be adjusted, either increasing or stabilizing, depending on how much risk is estimated. This adjustment is not just a price increase, but rather a reflection of the need for more appropriate and accurate protection. That way, you not only pay premiums, but also get protection that is in accordance with current business conditions and the risk environment. - Deeper and More Transparent Risk Evaluation
The renewal process now requires transparency and completeness of data from policyholders, such as risk management reports, mitigation plans, and the latest operational conditions. This approach is actually beneficial because it helps insurance provide appropriate solutions, not just provide standard policies. With a better understanding of risk, the protection you receive will be more effective and relevant, thus minimizing the potential for unnecessary claims in the future. - Adaptive Policy Clause and Coverage Adjustments
As risks change, insurance policies also experience changes in wording and clauses. For example, new exclusions related to political risks or cyber disruptions may be added to ensure the sustainability of the insurer. However, this does not mean that your protection is significantly reduced. Instead, your broker can help you find additional options or coverage extensions that suit your specific business needs, so that protection remains optimal without burdening excessive costs. - The Importance of Collaboration with Insurance Brokers
Through open communication and collaboration with a professional broker, you can better understand any changes and implications to your policy. Brokers act as partners who help navigate the complexities of the insurance market, find the best options, and facilitate negotiations with insurance companies. This makes policy renewal a more transparent, efficient process that is in line with your business protection goals.
Practical Tips for Renewing Policies Amidst Global Tensions
As a policyholder, you don’t need to feel anxious about these changes. With the support of a professional insurance broker, you can gain a comprehensive understanding and the right solution according to your specific business needs. It is important to always have open and transparent communication with your broker so that every step of the policy renewal can run smoothly and profitably.
To ensure your protection remains optimal amidst the dynamic global situation, here are some wise steps you can take when renewing your policy:
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- Renew early, don’t wait until it’s close to the due date.
With market conditions changing rapidly, updating early gives you time to review options, discuss with your broker, and avoid making rash decisions that could compromise your protection.
Review the current insurance value and business conditions.
Make sure the data you provide is in line with current operational conditions. Adjustments in asset values, new risk exposures, or changes in business scale are important to disclose to keep coverage relevant and avoid being underinsured. - Pay attention to the wording and clauses of the policy.
In times of global conflict or tension, some policies are updated with additional exclusions or restrictions. Don’t be afraid to ask your broker what these clauses mean in practice for your business.
- Renew early, don’t wait until it’s close to the due date.
- Take advantage of the expertise of professional brokers.
A broker who is accustomed to handling complex risks and following global dynamics can help you read market trends, navigate negotiations with underwriters, and identify appropriate coverage expansion or additional endorsement options.
- Consider diversifying protection.
If you previously relied on just one type of policy, perhaps now is the time to consider additional protection such as Political Violence, Business Interruption, or Cyber Insurance—depending on your risk profile.
With these steps, policy renewal is not just an administrative obligation, but a strategic step to maintain your business resilience in the face of global uncertainty.
The Strategic Role of Insurance Brokers in an Unstable Global Situation
In the midst of global dynamics full of uncertainty, the presence of competent insurance brokers is no longer just a complement—but a strategic partner in maintaining business resilience. The role of brokers is increasingly crucial not only in finding the best price offers, but also in understanding the broader context of risk and compiling it into applicable protection solutions.
Experienced insurance brokers have access to real-time market information, a deep understanding of geopolitical conditions, and direct connections with underwriters at various insurance companies. All of these are important provisions in designing a policy renewal strategy that is not only responsive to current conditions, but also anticipatory of future risks.
In addition, brokers serve as independent advisors who are on the side of the insured’s interests. They help bridge the gap between business needs and the capacity and prudence of the insurance company, including negotiating policy wording, seeking coverage extension options, and guiding clients through the claims process if a risk does occur. In many cases, having a broker who understands a client’s specific risk characteristics can make the difference between a mediocre policy and truly effective protection.
In a context of global tensions affecting many sectors—from logistics to cyber—the role of brokers is increasingly valuable. They can map hidden exposures that may not be visible in standard underwriting, and suggest comprehensive risk mitigation strategies. In a time of rapid market change, brokers help you stay ahead of the curve, not behind it.
Choose insurance broker it’s not just about finding a policy placement service, but choosing a strategic partner who understands how to protect the future of your business in a changing world.
The ongoing global tensions have not only affected economic dynamics, but also touched on the humanitarian side. We are concerned about the crisis and hope that the situation will improve soon. However, in the business world, every change—including geopolitical ones—must be faced with readiness and resilience.
Conclusion and Recommendations
Renewing your insurance policy today is no longer just an administrative routine, but a strategic step to maintain your business continuity amidst uncertainty. Especially for companies engaged in the energy, infrastructure, and mining sectors in Indonesia—where risks can come from various directions: dynamic regulations, project delays, changes in material prices, to operational disruptions due to global issues.
Your needs will not be covered by a standard policy alone. An insurance program is needed that is specifically designed for the sector, in accordance with the local context of Indonesia, and prepared by a party that understands risk thoroughly—from a technical, financial, and strategic perspective.
From L&G Insurance Broker, we help companies renew their insurance coverage with a holistic approach. We understand that every business has unique needs, especially in a rapidly changing global situation. We are here to provide full support, from risk analysis to solution recommendations that can provide a sense of security and confidence to move forward.
Looking for insurance products? Don’t waste your time and contact us now
HOTLINE L&G 24 JAM: 0811-8507-773 (CALL – WHATSAPP – SMS)
Website: lngrisk.co.id
Email: oktoyar.meli@lngrisk.co.id
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