INTRODUCTION Contributed by: Simon Cooper, DWF
A Year Dominated by Geopolitical Conflict, Climate Change and New Technology The purpose of insurance is to manage risk, but risk evolves constantly. In the last few years, the speed of that evolution has been particularly rapid and has raised many new challenges. How insurers and the law governing insurance respond to these challeng- es will, inevitably, vary from country to country. This guide not only explains the relevant law in the world’s leading jurisdictions, but also provides the insights of leading lawyers from around the world as to the future developments of risk and law in their countries. One of the major themes of 2025, and one that will continue into 2026 and beyond, was climate change. The 30th Conference of the Parties (COP30) sum- mit took place in Brazil in November 2025, and its importance for the insurance industry was highlighted by the fact that 2025 was one of the costliest years since 1970 in terms of natural catastrophe losses. Insured losses from natural catastrophes during the year are projected to reach approximately USD137 billion (according to preliminary results from the Swiss Re Institute for December 2024), stemming from a series of catastrophes ranging from wild fires to winter storms, flooding and hailstorms. This estimate means that 2025 will be the sixth consecutive year in which insured natural catastrophe losses have exceeded USD100 billion. This, and the fact that 2025 has been one of the hottest years on record, has only increased the already-widespread concern that climate change will cause a long-term increase in the number and severity of natural disasters. In addition, climate change is likely to challenge previ- ous assumptions about the nature of the risk posed by natural disasters; for example, in 2025 the United States experienced record wild fire losses outside the usual wild fire period, resulting in the highest fire loss- es in the region ever. From a legal perspective, these developments will raise issues of policy construction, for instance in relation to aggregation clauses and the obligation on reinsurers to follow the claims decisions of the underlying insurer. From a regulatory perspec- tive, one may also see steps by governments around the world to compel insurers to provide cover for an increasing range of catastrophic risks. An example of this might be Flood Re in the UK.
The year 2025 was also one of geopolitical instabil- ity, with the continuing wars in Ukraine and the Mid- dle East. As well as the horrendous human suffering caused by these conflicts, this instability raises dif- ficult issues for the insurance industry. For example, one of the features of the Western response to Rus- sia’s aggression has been the imposition of sanctions on Russia and its allies, as well as on individuals and organisations associated with Putin’s regime. These sanctions, and the retaliatory sanctions imposed by Russia, create a difficult legal and regulatory environ- ment for insurers, which is further complicated by the different approach to sanction enforcement in differ- ent jurisdictions. In addition to sanctions, the recent instability has emphasised the role of war risk insurance and the scope of the cover that it provides. This has been an issue not only in Ukraine but also with respect to the attacks on shipping in the Red Sea apparently prompted by the conflict in Israel and Gaza. It is unclear whether these attacks are state-backed and how they will be characterised in different jurisdic- tions for insurance purposes. Indeed, such has been the pressure on this class of business that the main marine insurers have limited the geographical scope of war risk cover in some disputed areas. Furthermore, it has only been possible to write war risk cover in some areas with government backing. The hybrid nature of modern warfare, including as it does aspects such as cyberconflict as well as physical conflict, brings into question many definitions of “war” in insurance covers. Most cyber policies exclude cov- erage for war and related risk, but defining and proving “war” in the context of a cyber-attack often challenges existing legal definitions, and it is important for insur- ance buyers as well as insurers to know how different jurisdictions approach this and related issues. Although the human cost of the COVID-19 pandemic has receded, the insurance and legal implications of the pandemic continue to be tested. Inevitably, this has led to extensive litigation in several jurisdictions, with the UK and the USA being just two examples. Consequently, courts around the world are revisiting previously accepted approaches to concepts such as causation and aggregation, as well as the proper con-
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