The rising tide of civil unrest: Critical implications for insurers

The insurance industry faces a mounting challenge as 2026 approaches, with warnings that the year will see more frequent disruptive protests and riots driven by rising political polarisation, mounting pressure on public finances, and social media's amplifying effects on civil unrest.

Verisk Maplecroft’s latest Civil Unrest Index reveals that protest activity has risen worldwide over the past two years, with demonstrations growing in size and commercial property being targeted more often, resulting in hundreds of millions of dollars in damages and business interruption.

A global phenomenon with economic consequences

The geography of unrest is broadening, touching both emerging markets and developed economies. Seven of the world’s largest economies are among the countries facing the most disruption, with Europe home to five of them: Germany, France, Spain, Italy, and the UK. The United States, recording the sharpest increase in the size of protests over the last 12 months and ranked third highest risk globally on the index, represents another potential flashpoint, whilst Brazil, Mexico, India, and Myanmar complete the top 10.

Beyond sheer size and frequency, the nature of unrest is evolving in ways that directly impact insurers. Riots and demonstrations are increasingly targeting commercial assets and infrastructure, leading to higher property damage and business interruption claims. Over the last year, 53 countries saw an uptick in attacks against commercial property during protests. For example, riots in Indonesia in August caused an estimated $50 million in insured losses. This shift means insurers must account not only for traditional property risk, but also for political violence and civil commotion risk, in markets where such perils were previously negligible.

Early warnings from insurance leaders

Insurance executives are already sounding the alarm about these trends. Munich Re, one of the world’s largest reinsurers, recently cautioned that tepid economic growth in Europe could fuel more riots and civil commotion. With Eurozone GDP growth forecasts lagging behind the U.S. and China, pressure on household purchasing power may translate into greater social instability. Such warnings highlight that insurers view civil unrest not as a distant political issue, but as a material risk to their portfolios – akin to natural catastrophes or cyber threats.

Implications for insurer strategy

The rise in civil unrest frequency and severity carries significant implications for how insurers operate:  

1. Underwriting and pricing

Insurers need to recalibrate underwriting models to account for political violence and civil commotion risk in regions historically considered stable. Higher expected loss frequencies from riots and protests will necessitate updated pricing, tighter coverage terms (such as exclusions or sublimits for strike, riot and civil commotion (SRCC) events), and careful accumulation management in exposed urban areas.

2. Risk assessment

Developing more sophisticated risk intelligence capabilities is crucial. Insurers should leverage political risk analytics (like indices from Verisk Maplecroft) to identify hotspots and monitor socio-political trends. This can inform portfolio steering; for instance, limiting property exposure in cities with surging unrest risk, or working with clients on resilience measures.

3. Claims and reserves

The industry’s recent experience from the $3 billion insured loss tally of the 2020 U.S. unrest to the multi-country events exceeding $1 billion shows that civil unrest can produce catastrophe-level losses. Insurers must ensure they hold adequate reserves and reinsurance protection for such scenarios. Claims teams should also be prepared for surges in volume, requiring robust catastrophe response plans similar to those used for natural disasters.

4. Client advisory 

There is an opportunity for insurers to support commercial policyholders with risk mitigation advice. This could range from security measures and crisis management planning to parametric covers that trigger payouts when unrest disrupts operations. Insurers who help clients proactively manage civil unrest risk can reduce losses and strengthen client relationships.

Building resilience amid unrest

In summary, the heightened civil unrest outlook for 2026 is a wake-up call for insurers to treat these events as a core strategic risk. Traditional property and casualty approaches must evolve to integrate political risk expertise. By updating underwriting practices, improving real-time risk monitoring, and collaborating with insured businesses on preventative strategies, insurers can better navigate the challenges posed by a world in upheaval. As global protests continue to swell in number and impact, the insurance industry’s ability to adapt will be critical in maintaining resilience for both their balance sheets and their clients’ livelihoods.