Gulf Political Risk Rates Are Up 30% - Is Your Trade Credit Cover Still Fit for Purpose?

In 2026, there has been a significant change in the political risk insurance market. The change is particular, corridor-specific, and immediately applicable to trade finance teams working in and through the Gulf.

Rates in Gulf countries are predicted to rise by up to 20–30%, according to Willis's Insurance Marketplace Realities report, which was released on May 7, 2026. However, rates for traditional political risk insurance and trade disruption insurance are predicted to either stay the same or rise by only 5%.

It is important to pay attention to that discrepancy. There has been uneven hardening of the market. The exposures at the core of its selective repricing are those that are most pertinent to trade finance portfolios that are focused on Gulf energy, commodities, and supply chains that depend on transhipment.

A Market Divided: Different Rules for Different Exposures

Standard, diversified, non-sensitive risks continue to benefit from competitive conditions, while exposures tied to geopolitical flashpoints, sovereign leverage, strategic commodities, or critical trade corridors are being selectively repriced, constrained, or more tightly structured. This is no longer a traditional insurance cycle; market behaviour is driven by capital preservation, aggregation management and geopolitical uncertainty rather than underwriting competition.

For trade finance professionals, this distinction matters operationally. A portfolio that appeared well-covered at last renewal may now sit on the wrong side of that bifurcation - with corridor-specific exclusions, tighter aggregation limits, or restructured wording that was not material at inception but is highly material today.

In the energy segment specifically, lenders in the Gulf are increasingly requiring risk protection before funding trade-linked transactions, making insurance evidence a credit structuring requirement rather than an optional overlay.

Claims Are Rising. So Is Demand for Cover.

The demand surge for political risk and trade credit insurance in 2026 is not theoretical. For the third consecutive year, political risk and trade credit insurable losses from geopolitical causes exceeded $250 million, the second-highest level recorded across nine years of Willis survey data, and interest in political risk and trade credit insurance as a risk management tool has increased accordingly.

The Allianz Trade Global Survey of 6,000 companies across 13 markets found that geopolitical and political risk has become the leading threat globally for 65% of companies in 2026, overtaking supply chain complexity, which had been the top concern in 2025.

Rising claims and rising demand arriving simultaneously create a structuring challenge: the cover being bought is increasingly scrutinised at the claims stage against wording that underwriters are tightening at renewal. The gap between what a policy appears to cover and what it pays out on is widening for corridor-sensitive exposures.

Tariffs Are a Separate Pricing Pressure and Equally Unpriced

Despite elevated geopolitical uncertainty, 61% of respondents to the Willis Political Risk Survey selected tariffs as the political risk most difficult to manage in 2026, with 61% also reporting a direct negative financial impact from tariffs on their business.

Buyer credit stress is therefore rising on two simultaneous vectors: corridor and counterparty risk on one side, tariff-driven supply chain restructuring and buyer stress on the other. Most trade credit policies were structured around either risk in isolation. Very few are designed for their combination, and the claims data is beginning to show it.

What Underwriters Are Now Asking For

The practical consequence for trade finance teams is that the insurance evidence required to satisfy credit committees has become more specific, more data-intensive, and more frequently requested than twelve months ago.

Underwriters are asking for more granular counterparty data, clearer beneficial ownership trails, tighter documentation of cargo routing and milestone visibility, and explicit confirmation of sanctions screening governance, all before quoting on Gulf-corridor exposures. For banks and corporates that have not updated their risk monitoring and documentation infrastructure, this creates friction at exactly the moment when cover is most needed.

The structuring questions that follow, single-buyer versus portfolio cover, political risk riders, corridor-specific exclusions, ICIEC and ECA participation structures, require active engagement with underwriters, not passive reliance on existing policy terms.

The Conversation at the Global Trade Finance Expo

The Risk Transfer and Capital Relief panel on 8 October will bring together underwriters, credit insurers, ECAs, and trade finance practitioners to address structuring lessons from volatile markets, what buyers and underwriters now need from each other in terms of data and controls, and how credit insurance, guarantees, and risk participation are being deployed to support capacity and growth in 2026.

It is a timely conversation. The policies most trade finance teams are currently operating under were written for a different risk environment. The Expo is the right room to reassess them.

Join us at the Global Trade Finance Expo, 8 October 2026, Fairmont Hotel, Dubai, UAE.

Senior contributors from Coface, Marsh McLennan, Allianz Trade, ICIEC, Deutsche Bank, Barclays, Citi, DP World Trade Finance, HSBC, Olam Global Agri, Emirates Islamic Bank and many more will address the full risk transfer, compliance, and digitisation agenda.

Request the full agenda or secure your place →

For sponsorship or registration enquiries, contact info@qubevents.com

By: Zinah Abdaki, CMO at QUBE Events

Sources: Willis Insurance Marketplace Realities 2026 Spring Update — Political Risk, 7 May 2026 · Willis Ninth Annual Political Risk Survey Report, 12 May 2026 · Allianz Trade Global Survey 2026 · Mordor Intelligence — Trade Credit Insurance Market Report, June 2026