According to the latest Political Risk Index from WTW, the threat to vessels, undersea cables, and offshore oil installations has increased due to advanced weapons and the actions of certain states, particularly Russia and Iran, who disregard international maritime laws.
This is identified as an emerging risk from ‘gray zone aggression,’ which refers to actions aimed at weakening a country through means short of war. WTW’s research identifies three primary types of gray zone flashpoints: military conflicts and rivalries (e.g. Ukraine, South China Sea), fragile states (e.g. Lebanon, Yemen, Syria, Iraq), and ideological polarisation (e.g. political interference in Latin American elections).
Examples of hybrid warfare include destruction of critical infrastructure, state cyber-attacks, weaponisation of migration, sponsorship of violent non-state actors, disinformation campaigns, and declared or undeclared economic sanctions.
The report also observes an increasing trend in gray zone activities, partly driven by rising middle powers operating with limited military budgets.
Other findings include
- Marine assets: The global shadow fleet, which has grown exponentially since Russia began using it to export oil, was identified as another threat in the report. The vessels lack standard P&I insurance, do not undergo regular maintenance, and habitually alter their AIS signals.
- Insurance impact: Gray zone attacks causing exclusions and cancellations of insurance cover lead to disruptions and rerouting, affecting businesses reliant on timely shipping. However, trade disruption insurance offers some recourse for impacted companies.
- Aerospace threat: There is an increasing possibility for the aerospace sector to become a key gray zone target, and attacks such as GPS jamming and spoofing are already happening.
Without insurance, many ships will not sail and planes will not fly, so improving our understanding of gray zone risks is vital for the protection of people and assets and the health of global commerce.
… said Samuel Wilkin, Director of political risk analytics, WTW
Samuel Wilkin also stated that without insurance, many ships would not sail and planes would not fly, highlighting the importance of improving the understanding of gray zone risks to protect people, assets, and global commerce.
He noted that these attacks have increased in recent years for several reasons. One reason is that countries deeply interconnected through globalization often find themselves in adversarial relationships, and these interconnections provide many avenues for gray zone actions, particularly targeting globalized businesses. Additionally, new technologies have enabled gray zone actions, such as cyber-attacks and remote drone strikes.
Wilkin also emphasized that hybrid warfare is likely to continue to rise and evolve, urging insurers to understand the implications of ambiguous gray zone activities to assess risk accurately.
