Escalating US-Israel-Iran Conflict Drives Demand for Cyber Insurance
Jakarta — Escalating conflict in the Middle East between the US and Israel versus Iran is expected to increase not only global geopolitical uncertainty but also drive a rise in cross-border cyber attack risks.
This situation has the potential to trigger a surge in demand for cyber insurance across various countries, including Indonesia.
A recent report from GlobalData indicates that modern geopolitical conflicts are increasingly accompanied by escalations in cyber activities, ranging from cyber warfare and hacktivism to ransomware attacks targeting the business sector, financial institutions, and digital infrastructure.
In a GlobalData survey of commercial insurance industry practitioners, approximately 27.4% of respondents assessed that cyber insurance would become the business line with the largest growth in demand amid increasing global geopolitical tensions.
Cyber insurance ranks at the top, ahead of political risk insurance (25%), supply chain insurance (23.8%), and business interruption insurance (13.1%), indicating that industry practitioners increasingly anticipate that geopolitical shocks will impact a rise in digital security incidents.
According to GlobalData analysts, current geopolitical hotspots are no longer solely reflected in conventional warfare risks or political risk insurance, but also in mounting threats to corporate digital systems worldwide.
Charlie Hutcherson, an insurance analyst at GlobalData, stated that geopolitical flashpoints are increasingly valued not only through maritime war risks and political risk but also through expectations of cyber escalation.
“The GlobalData survey shows that cyber insurance is viewed as the commercial product most likely to experience increased demand, as businesses anticipate a higher probability of disruptive cyber events alongside physical disruptions to trade routes,” he said, quoted on Tuesday (10/3/2026).
Recent developments in the Middle East increasingly demonstrate how geopolitical conflict can affect insurance markets across various lines. The report indicates that some maritime insurance companies have suspended war risk coverage for vessels entering the Persian Gulf and surrounding waters, whilst premiums for ships transiting the Strait of Hormuz have increased as underwriters reassess the threat environment surrounding one of the world’s most strategically important energy corridors.
Digital Risks Rise
Current geopolitical conflicts increasingly spill over into digital space. Cyber attacks can target corporate networks, payment systems, and data centres supporting digital economic activity.
For companies, the impact can include operational disruptions, customer data breaches, and financial losses from halted digital services.
According to developing reports, one form of support provided by China and Russia to Iran in its conflict against the US and Israel is through cyber intelligence operations and geospatial operations targeting adversary strategic assets.
As a result, many global corporations have begun strengthening cyber risk management strategies, including through the purchase of cyber insurance policies to protect digital assets and ensure business continuity.
Hutcherson concluded that whilst underwriters have already reassessed risks related to shipping corridors and energy routes such as the Strait of Hormuz, the larger shift is that companies are planning for conflict impacts spreading to Western markets through cyber activities.
“Consequently, insurance companies will face additional pressure to refine their cyber risk appetite, pricing, and accumulation management if they wish to meet customer needs and retain business in an increasingly volatile environment.”
The Cyber Insurance Market in Indonesia
In Indonesia itself, the cyber insurance market remains relatively small, but its potential is viewed as very substantial alongside accelerating digital transformation.
Several industry practitioners note that the proportion of cyber insurance premiums in Indonesia remains at a very small range compared to total industry premiums, because the level of digital risk literacy and awareness amongst companies is still developing.
Nevertheless, the trend of rising cyber attacks has made this product increasingly attractive to sectors with high digital dependence, such as banking, fintech, e-commerce, telecommunications, and technology companies.
Some insurance companies have even begun developing specialised products to protect companies from various digital risks, ranging from data breaches, ransomware attacks, to IT system operational disruptions.
On the other hand, authorities and industry have also begun strengthening cyber resilience in the financial sector through collaboration with national digital security institutions to map the cyber risk profile in the insurance industry.
As Indonesia’s economic digitalisation expands further, the need for cyber risk protection has the potential to continue increasing, particularly if global geopolitical tensions trigger escalation in cross-border digital attacks.