In this special edition of Risk Radar, we focus on how geopolitical uncertainty is impacting the airline industry from a broking, underwriting and specialist intelligence perspective. In these uncertain times, it is essential that clients, brokers and underwriters have access to timely, accurate information, a theme we explore with guest insight from Inigo and Dyami Security Intelligence.
Before turning specifically to geopolitical risks, and with the final quarter of 2026 approaching, we first provide a brief update on the current market and the conditions airlines might expect during the busy renewal season.
Despite continued competition and few major losses so far in 2026, Hull All Risks and Liability underwriters are still pushing for premium and rate increases as they seek to establish more sustainable income levels. Underwriters are basing their stance on the major airline losses, rising attritional claims costs incurred and diminishing premiums over recent years.
Underwriters are becoming increasingly selective, sometimes declining risks, offering uncompetitive terms or deploying less than their full capacity. As a result, while the number of participating markets remains substantial, the capacity genuinely available to an individual airline may depend heavily on its own operations, geography, claims history and overall attractiveness to underwriters.
This is not a uniform hard market, and airlines with significant US liability exposure, higher limits or adverse loss records are likely to face the greatest pressure. Competition remains for attractive business, particularly among Tier 2 and Tier 3 airlines, which are increasingly viewed as important growth opportunities by underwriters and brokers.
Airlines with favourable risk characteristics and access to competing capacity may therefore achieve more positive renewal results, albeit from a starting point of higher terms than those encountered at last year’s renewal.
Underwriting capacity has supported softer pricing, with reductions continuing to be available for airlines with limited exposure to conflict zones. Nevertheless, risks involving high-risk transit routes or ground operations in conflict-affected territories remain subject to heightened scrutiny and potentially significant rating volatility.
Short-notice cancellation provisions for specific territories could become prominent as geopolitical conditions change. Although underwriting capacity remains strong, an escalation in the Middle East, South China Sea or another major conflict zone could prompt a rapid market response, as risk aggregation remains one of the most feared aspects of modern insurance.
This brings us to our guest contributors, who offer valuable insight into the implications of the current geopolitical landscape for insurers and aviation operators.
Geopolitical instability is keeping aviation war risk firmly in focus. Activity across the Middle East, continuing insecurity in the Sahel and tensions between China and Taiwan all have the potential to disrupt operations quickly. Missile and drone attacks, GPS interference, airspace closures and rerouted traffic can increase the immediate threat to aircraft while concentrating exposure at major airport hubs.
The impact can travel well beyond the conflict zone. Higher fuel, food and transport costs may add pressure to economies already facing political or social instability, creating further aviation security concerns. As warfare technology evolves and potential loss scenarios emerge with little warning, current and accurate information from airlines is increasingly important to support timely underwriting decisions.
To explore what this means in practice, we asked Natalie Larkin of Inigo to share an underwriting perspective.
Inigo is a global specialty insurance and reinsurance company. Their specialist aviation war insurance covers major operators plus associated lessors, banks and finance parties, manufacturers, and general aviation worldwide - in addition they also offer Hull and Liabilities capacity to their leasing clients. Inigo’s differentiates itself through its use of real-time exposure monitoring, fleet tracking and geopolitical risk analysis, supporting clients operating in both conventional and higher-risk territories.
Through a commitment to insight-led underwriting and long-term client relationships, Inigo supports customers in navigating an ever-changing global risk landscape and has established itself as a well-respected and technically capable lead market.
Q - Which geopolitical or security developments are you watching most closely from an Aviation War perspective?
The Middle East remains a primary concern, with risk to aviation assets heightened. The combination of missile activity, drone attacks and risk of misidentification can hugely impact aviation operations. Beyond the direct threat to aircraft, sudden airspace closures and traffic rerouting can create significant accumulation exposures for insurers.
Recent events flagged the risk of a multi-hub airport loss event, and highlighted the importance for insurers to review their aggregate exposures in the region.
The Middle East conflict has also raised concerns around the downstream impact on other regions, such as Africa. Many African countries remain highly exposed to external influences through energy imports, food supply chains and other imports such as fertilisers. A prolonged conflict in the Middle East can drive higher fuel, fertiliser and transport costs, increasing inflationary pressures and creating economic stress in countries already facing political or social challenges. The risk of conflict-driven economic fragility may contribute towards increased aviation security risk.
The Sahel region of Africa remains a concern, particularly countries such as Mali, Burkina Faso and Niger due to the ongoing events caused by violent non-state actors. We have seen targeted attacks on airports in the region in the past, such as at Bamako's Modibo Keita International Airport (BKO) in 2024 where the Jamaat Nusrat al-Islam wal-Muslimin (JNIM) group attacked the airport and adjacent military facilities, resulting in a number of aircraft being heavily damaged or destroyed. More recently the airport at Niamey (Niger) has been attacked twice in 2026, underlining the continued instability and potential for rapid escalation.
We continue to monitor the relationship between China and Taiwan, and how any deterioration might impact the aviation industry from a Hull War perspective ensuring we are well positioned to respond appropriately should the situation deteriorate.
More broadly, geopolitical instability continues globally, as does the development in warfare technology. The increased use of drones, missiles and GPS interference creates a more complex threat environment where aviation risks are no longer confined to traditional conflict zones and potential loss scenarios can emerge with little warning. The question remains - with such widespread uncertainty, how can insurers best support clients whilst monitoring their aggregates in an ever-changing risk environment? Information shared by clients remains integral to enabling underwriters to make informed, timely decisions.
Q - What does your Aviation War internal geopolitical monitoring capability look like today?
At Inigo, data is at the heart of everything we do, and Aviation War is no exception. We have invested heavily in our Aviation War data and technology capabilities, and geopolitical risk monitoring is central to our underwriting approach – combining real-time intelligence, qualitative analysis, exposure data and underwriter judgement.
Risk monitoring works hand-in-hand with asset tracking, which is why we invest in systems that enable us to monitor our portfolio of assets live. This is particularly valuable for event-response: when a situation is developing, we can assess our exposure at a particular airport or within a specific region. It also helps us identify areas where we may be regularly over-exposed by analysing ground aggregates by the hour. Both capabilities are key to effective underwriting, portfolio management and internal escalation.
Our geopolitical monitoring is not solely reactive; we also build intelligence into our pre-bind underwriting workflow so each client is assessed individually. We use external data sources to track historic flight data and overlay geopolitical risk scores to create a bespoke analysis of each client. However, geopolitical situations can change rapidly and with very little warning, so live monitoring is essential in helping us reassess whether a pre-bind view of risk remains appropriate.
We get the most value from real-time intelligence when it is overlaid with advisory and geopolitical risk consultancy. Real-time alerts allow us to move quickly, but the advisory layer helps us filter the noise and understand whether an event represents a material change in risk for our portfolio. We licence a number of third-party data providers which support our day-to-day decision making through expert analysis.
Access to timely, reliable intelligence enables aviation stakeholders to understand how rapidly changing geopolitical and security developments may affect routes, destinations and operational exposure. By identifying emerging risks before they escalate, organisations can make more informed decisions, strengthen contingency planning and enhance operational resilience.
The strongest insight combines live information with context and judgement. As Inigo’s underwriting perspective demonstrates, real-time alerts can identify an event, but advisory analysis helps determine whether it represents a material change in risk. When this intelligence is considered alongside an airline’s schedule, aircraft values, ground assets and route alternatives, it can support faster event response, clearer exposure information and more confident conversations between clients, brokers and underwriters.
As geopolitical volatility continues to influence global aviation, specialist intelligence providers such as Dyami play an increasingly important role in helping the industry anticipate disruption, respond to evolving threats and support safer, more secure operations worldwide.
Eric Schouten from Dyami has shared with us with some of their current insights on Middle East and Europe/Asia.
Dyami Security Intelligence is a specialist provider of aviation risk and security intelligence that helps organisations respond to an increasingly complex geopolitical environment. Combining real-time monitoring, human intelligence sources and analyst-led assessments, Dyami provides actionable insight into conflict zones, airspace restrictions, GPS interference, civil unrest and other emerging threats that can affect aviation operations.
The Middle East increasingly defies a simple open-or-closed view of airspace. Instead, operators face a constantly changing patchwork of FIRs that may be legally open but subject to regulatory warnings, avoided by major carriers, exposed to short-notice restrictions or affected by changes in the security environment around individual airports.
The Tehran FIR (OIIX) has repeatedly closed and partially reopened, but most foreign operators avoid it. Iraq’s Baghdad FIR (ORBB) remains open, although EASA (the European Union Aviation Safety Agency) advises against using it. Erbil International Airport (EBL/ORER) continues operating, despite being one of the most consistently hit targets of the conflict. And Erbil is losing the US and coalition air-defence presence that protected it due to the scheduled pullout by end of September. Beirut-Rafic Hariri International Airport (BEY/OLBA) remains open and major airlines continue to fly there, against EASA recommendations to avoid the Beirut FIR (OLBB) at all.
An airspace reopening does not necessarily mean an immediate return to normal traffic patterns. Airlines make their own security assessments, regulators may maintain warnings after restrictions are lifted, and operators can differ sharply in their tolerance of the same airspace.
Conditions can also change without the status of an entire FIR changing. Erbil International Airport (EBL/ORER) remains operational despite repeated attacks during the regional conflict, while the planned withdrawal of US and coalition forces is altering the security environment around the airport.
Airlines therefore need to know not only whether an airspace is available, but whether it remains operationally viable, how other carriers and regulators are responding, and how a change there will affect the alternative routes around it.
Europe-Asia routings have far less room to manoeuvre than they did three years ago. Russia’s invasion of Ukraine removed a substantial part of European airspace from practical network planning, pushing more traffic south and east through Turkey, the Caucasus, the Gulf and Central Asia. Persistent instability across the Middle East is now squeezing the corridors that absorbed the rerouted traffic.
A formal open-or-closed view of airspace is no longer enough. A route may be legally available while remaining subject to regulatory warnings, short-notice restrictions or changing security conditions around individual airports. A closure in one country can push traffic towards another corridor, where local conditions may themselves change within hours.
Azerbaijan has become an important bridge between Europe and Asia for carriers unable or unwilling to cross Russia or Iran. Temporary restrictions can narrow the remaining routing options quickly and push traffic closer to other sensitive areas. Afghanistan provides another example: its airspace may be open, but the absence of conventional en-route air traffic control and pressure at neighbouring entry points can create delays, higher fuel burn and greater operational complexity.
For airlines, these changes can affect fuel planning, crew duty, technical-stop requirements, payload and diversion options. For underwriters, they can change the pattern and concentration of exposure. The more alternatives disappear, the more important it becomes to understand developments beyond the airspace an aircraft is expected to cross.
Renewal outcomes will increasingly reflect the individual characteristics of each airline rather than a single market-wide trend. Some airlines may benefit from competition, while businesses with substantial US exposure, large liability limits, adverse claims experience or operations in higher-risk territories should prepare for more challenging negotiations.
In this environment, early engagement, accurate exposure information and a clearly articulated risk narrative will be important in differentiating an airline from its peers. Up-to-date detail on routes, aircraft location, operational changes and contingency planning can help brokers and underwriters understand how exposure is being managed as geopolitical conditions evolve.
Combined with timely intelligence and specialist advice, a proactive broking strategy can help identify genuinely deployable capacity, anticipate underwriting concerns and create competitive tension wherever market conditions allow. The result is a stronger basis for renewal discussions and more informed decisions as the risk landscape changes.
Price Forbes offers a deep understanding of today’s complex risks and a relentless focus on what’s next, giving you the edge to succeed tomorrow.
Aviation war markets face renewed volatility as geopolitical tensions rise. Explore market responses, emerging trends, and guidance for airline risk management.
Rising claims and geopolitical tensions meet fierce competition in the airline insurance market. As the 2025 renewal season approaches, will insurers push through rate increases or be held back by abundant capacity?
On 11th June 2025, the UK High Court ruled that the losses incurred by lessors as a result of the aircraft seized by Russia, following the invasion of Ukraine, were to be covered under Hull War policies.
Our experts publish insightful thought leadership, market updates, and industry news publications to keep you informed and ahead of the curve. Subscribe to receive the latest updates straight to your inbox.
