Some 47% of firms have experienced a political risk loss in excess of $50m, broker WTW warned, and 96% said they have invested in political risk management capabilities.

War risks on the rise

Companies are expanding their political risk management capabilities, after a year in which nearly a fifth of companies reported having to restate earnings due to geopolitical events, according to a study from WTW.

More than two-thirds of firms (69%) have reported supply chain disruptions relating to geopolitics, according to the broker’s report “How are leading companies managing today’s political risks?”

The seventh annual political risk survey produced by WTW found that the general sentiment of alarm measured last year among companies is being channeled into greater preparedness.

Some 96% of respondents said they have invested in new political risk management capabilities this year, including enhancement of corporate processes and creation of cross-functional teams.

State-sponsored supply chain disruption appears as one of the main business concerns for 2024 and ‘grey zone aggression’, partly as a result of disruptions in the Red Sea, WTW said.

‘Grey zone’ refers to action used to weaken a country by any means short of war, and has reached the top 10 risks (see table below) for the year for the first time.

Other findings included:

  • 47% experienced a political risk loss in excess of $50m
  • The escalations resulting from the conflict in Gaza have had less of a financial impact than the conflict in Ukraine: 4% reported a material negative financial impact for Gaza vs 20% for Ukraine.
  • Trends toward geostrategic competition and populism are expected to “strengthen”
  • With the US heading into elections, 64% reported concern about political risk in North America – the same proportion as reported concern about political risk in Asia.

“After a couple of challenging years companies seem to have accepted that significant political risk losses are the new normal, and are working on building risk management capabilities,” said Sam Wilkin, director of political risk analytics at WTW.

As one oil industry executive cited in the report put it, “political risk is acknowledged, but it does not deter operations”, adding that “it is viewed as a factor to be managed within our broader risk management framework”.

Wilkin highlighted that “panelists were particularly concerned about infrastructure attacks, like sabotage of pipelines and cables. In addition, assets in international waters are being targeted because they can be struck without inviting retaliation.”

The wide dissemination of drone technology has made such remote attacks much easier, he noted.

One European energy executive shared that they “are facing hybrid or gray zone threats due to the Ukraine war – incidents of sabotage like the Nord Stream attacks or cyberattacks, that leave perpetrators with plausible deniability”.

The conflict in Ukraine maintains its position as the top risk of the year, followed by concerns about elections.

With more citizens voting in 2024 than at any time in the next few decades across several countries, managing political uncertainty and potential business repercussions was identified as a significant challenge. Panelists shared concerns about trade wars, rising protectionism and populism.

Top Risks 2024


Ukraine complications and escalation


Year of elections


US-China rivalry


Uncertain climate policy


Mismanaging China risk


Middle East escalation


The next big conflict


Home-market growth slowdown


Institutional decay


Gray zone action

The survey and interviews, conducted in March and April 2024 by Oxford Analytica, are based on responses received from 50 companies around the world, of which 64% have revenues in excess of $1 billion. The complete report can be downloaded here.