Interconnected geopolitical risks are reshaping global shipping
At the Global Risk Summit, the panel on the ‘Geopolitics of marine, shipping and supply chains’ brought into sharp focus a reality that many organisations are only beginning to grasp: global trade is no longer just an economic system, but a deeply interconnected web of geopolitical, technological and security risks.
Moderated by Kay McMenamin, of WTW, the discussion drew together expertise from across maritime operations, defence, insurance and organisational resilience to explore how these risks are evolving – and hoe businesses need to respond.
The panel also included Tom Sharpe, partner, Special Project Partners, Simon Lockwood, head of shipowners Willis Marine GB, Simon Sølvsten, head of organisational resilience research, WTW and Fergus Critchley, global head of terrorism and political violence, WTW.
A central theme was the concept of interconnectivity. Risks no longer exist in isolation; disruptions in one region or domain can cascade rapidly across the globe.
Former Royal Navy officer Sharpe illustrated this through a tour of global maritime choke points. These narrow passages – such as the Strait of Hormuz, Suez Canal and English Channel – carry a disproportionate share of global trade. Drawing on analysis inspired by The Economist, he emphasised that, as now clearly seen, even a temporary closure of one of these routes can trigger massive re-routing costs, delays and geopolitical consequences.
Importantly, Sharpe distinguished between “green”, “amber” and “red” choke points – ranging from relatively stable to highly contested. Yet even so-called stable routes are increasingly exposed to hybrid threats. Activities such as cable interference, drone incursions and cyber manipulation are rising, blurring the line between peace and conflict. This “grey zone” activity, as he noted, represents a level of hostility below traditional warfare but with significant disruptive potential.
The discussion then turned to the implications for business and risk management. Critchley highlighted that many geopolitical risks once considered theoretical are now material realities. The closure or disruption of key trade routes no longer requires full-scale war; relatively limited actions can have global consequences. He stressed that organisations must move beyond siloed thinking and instead adopt a holistic view of risk – integrating geopolitics, supply chains, infrastructure and insurance.
From an insurance perspective, this creates both a “node” and a “coverage” problem. Critical infrastructure and trade routes represent concentrated points of vulnerability, while traditional insurance models often struggle to address complex, interconnected risks. Critchley argued businesses must rigorously stress-test their insurance programmes against extreme, but plausible, scenarios, identifying gaps that may not be immediately visible.
Shipping itself remains the backbone of global trade, accounting for roughly 80 to 90% of goods movement worldwide. Lockwood pushed back against the notion that the marine insurance market is retreating. Instead, he framed the challenge as one of perception, pricing and responsibility.
Decisions about whether ships transit high-risk areas are driven not only by cost but by duty of care to crews and the realities of modern information access. Today’s seafarers are connected in real time, making risk awareness – and anxiety – far more immediate than in previous decades.
Technological change is also reshaping maritime risk. From cyber spoofing of vessel locations to the increasing use of AI in tracking and decision-making, the industry is undergoing rapid transformation. Sharpe noted that reliance on basic systems such as AIS (automatic identification systems) is no longer sufficient, urging greater investment in advanced data and intelligence capabilities.
Addressing the supply chain, Sølvsten underscored a critical gap: most organisations lack visibility beyond their immediate suppliers. Yet a significant proportion of disruptions originate deeper within the chain. True resilience, he argued, requires understanding not just direct suppliers but entire networks, including alternative sourcing options and the cost of switching between them.
This shift towards resilience comes with an unavoidable trade-off. For decades, supply chains have been optimised for efficiency and cost reduction. Building resilience – through redundancy, diversification and stress testing – inevitably increases costs. However, as recent disruptions have shown, inaction can be far more expensive.
Looking ahead, the panel’s message was clear. Businesses must embrace uncertainty, challenge outdated assumptions and rethink how they approach risk. Insurance remains a vital tool, but is no substitute for proactive risk management. As McMenamin concluded, the goal is not merely to respond to disruption, but to anticipate it – developing agile, informed and resilient strategies for an increasingly volatile world.
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
