How insurers should navigate political risks and policy signals

2026 may have started out electorally quieter than recent years, but the underlying forces reshaping the global risk landscape are accelerating. 

While a lighter election calendar and the continued strength of several incumbent governments have reduced the immediate risk of sudden political shocks, stability should never be mistaken for certainty – as the events of the last month continue to highlight.

Even before the most recent news from the Middle East broke, policy signals emerging this year had already suggested a more complex and potentially more volatile operating environment for both businesses and insurers.

Elections to watch

Several national elections in 2026 warrant close attention. In Hungary, prime minister Viktor Orbán faces his most significant electoral test since 2010. 

The outcome will serve as a barometer for support of European Union-sceptic policies within the bloc and for a government that has maintained relatively warm relations with Russia since the expansion of the war in Ukraine.

Fragmentation in global trade, evolving alliances and intensifying US-China competition are creating a more reactive and less predictable policy environment. Governments are increasingly using trade measures, sanctions and regulatory tools to advance strategic interests.

Jason Harris, QBE International

In the UK, local elections in May are unlikely to be decisive in isolation, but they may provide early signals of broader political realignment. 

Weak performance by the governing Labour party, combined with a strong showing by Reform UK, could reshape the political narrative ahead of the next general election and influence policy debates on immigration, energy and constitutional reform.

Sweden’s September election will test a centre-right coalition navigating economic pressures and immigration challenges amid warnings of foreign interference. 

And in the US, November’s mid-term elections could alter the balance of power in Congress, with cost-of-living pressures and electoral boundary disputes contributing to a highly charged political backdrop.

These contests are not just events in the political calendar; they are indicators of deeper structural shifts. 

They reflect rising voter sensitivity to economic stress, migration, security and the perceived effectiveness of institutions. Those pressures will shape policy choices long after the ballots are cast.

A defining risk

More broadly, geopolitics is likely to remain the primary source of policy uncertainty this year. 

Fragmentation in global trade, evolving alliances and intensifying US-China competition are creating a more reactive and less predictable policy environment. 

Governments are increasingly using trade measures, sanctions and regulatory tools to advance strategic interests. 

Secondary sanctions and export controls are becoming more common, increasing the complexity for businesses operating across jurisdictions.

The war in Ukraine continues to evolve, with implications for defense spending, supply chain resilience, commodity markets and regulatory risk. 

Meanwhile, China is positioning itself as a source of stability in contrast to what it characterises as shifting Western policy, even as uncertainty remains around how it will deploy regulation and trade levers in pursuit of strategic objectives.

For organisations operating on a multinational scale, these dynamics mean that policy decisions, geopolitical developments and economic outcomes are now more tightly interlinked than at any point in recent years.

Operational priorities

This environment reinforces three priorities. First, agility. Policy responses are increasingly reactive and adaptive. 

Underwriting, pricing and portfolio management must reflect the speed at which operating conditions can shift.

Second, scenario planning. Political developments once considered low probability can quickly move into the mainstream. 

Customers are seeking greater clarity on how electoral shifts, sanctions, regimes or trade disputes could affect their risk profiles.

Third, partnership. In a fragmented world, we have a critical role to play in helping customers navigate uncertainty, whether through political risk coverage, supply chain resilience solutions or advisory insight.

While 2026 may not deliver a single defining shock, the cumulative effect of geopolitical fragmentation and subdued global growth is likely to increase volatility and test confidence. 

The defining challenge is not political risk itself, but the speed at which it translates into economic consequence. 

The insurers that will thrive are those that anticipate change rather than react to it - remaining a source of stability and resilience for the businesses and communities we serve.