In today’s world, international disputes are no longer confined to the battlefield or diplomatic channels. With rising tensions, shifting alliances, and sanctions becoming common political tools, cyber risk has taken centre stage. Cyber insurance underwriters are increasingly faced with a critical challenge – not whether geopolitics will affect their portfolios, but how rapidly and significantly those impacts will manifest.
What used to be a background consideration is now becoming a frontline factor in underwriting decisions, according to KYND.
Sanctions, tariffs, and trade wars are no longer isolated events — they interact and amplify one another, turning geography into a crucial factor for insurers evaluating digital risk.
How geopolitical events influence cyber insurance risk
Escalating trade disputes and targeted sanctions are forcing businesses to make sudden shifts in their digital infrastructure.
These reactive changes often introduce new security vulnerabilities, such as misconfigured services or weakened protections. For cyber insurers, understanding the geographic footprint of a company’s digital assets is becoming essential — because where data is hosted can directly affect risk exposure.
This volatile environment has elevated the importance of granular insight into an organisation’s online presence, especially in regions affected by political instability or sanctions. Simply put, geography is now a core variable in cyber underwriting.
Cyber risk in the geopolitical context
Recent global developments have shown how cyber risk can rapidly escalate in tandem with geopolitical shifts. Events such as sanctions and realigned trade policies create fertile ground for cyber threats.
These risks can ripple across entire supply chains and critical infrastructure, often without clear attribution, making it difficult for insurers to model and price them accurately.
Unknown operations in a sanctioned country
One revealing case involved KYND’s work with an insurance partner, where a company was found to be operating websites in Iran.
These websites weren’t flagged during the usual firmographic checks but were discovered through KYND’s technographic analysis. The websites were hosted in the US and France, yet they had self-signed SSL certificates — a significant red flag.
This lack of proper certification opened the door to several risks:
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Man-in-the-Middle Attacks (MITM): Without a trusted certificate authority, attackers could intercept data.
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Phishing and spoofing: Self-signed certificates make it easier for attackers to impersonate the site.
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Weakened encryption: Without validation, encryption protocols are more easily compromised.
While the mere presence of a website in Iran wasn’t automatically a red flag, the associated vulnerabilities and hosting structure significantly raised the risk profile.
The situation highlighted the dangers of operating under the assumption that digital infrastructure is fully understood — a gap that can expose both businesses and their insurers.
The consequences for cyber insurers
Overlooked digital vulnerabilities can lead to severe consequences for cyber insurers. When a firm’s digital footprint isn’t fully visible at the underwriting stage, insurers risk underestimating exposure and mispricing coverage.
This raises the likelihood of large, unexpected claims from avoidable incidents.
The existence of infrastructure in sanctioned countries also introduces regulatory complications.
Jurisdictions like the UK, US, and EU enforce strict rules around dealings with nations like Iran. If insurers provide coverage to entities operating in these areas, they risk violating these sanctions — exposing themselves to fines and reputational damage.
Additionally, claims processing in sanctioned regions can be problematic. Insurers may be restricted from paying out or providing support due to international laws. These operational challenges can disrupt service to policyholders and complicate reinsurance arrangements.
Digital blind spots and regulatory risk
Based on KYND’s broader experience, it’s clear that many organisations falsely believe they have comprehensive visibility into their digital assets.
In reality, hidden connections and dependencies often exist, especially in high-risk or unstable regions. These blind spots increase exposure to regulatory breaches, compliance failures, and potential claim denials due to previously unknown operations.
A real-world snapshot from KYND’s insights
To better understand these risks, KYND conducted a snapshot analysis of organisations based in politically sensitive regions. The research focused on certificate and email vulnerabilities — common entry points for attackers.
These issues often suggest larger systemic problems. KYND’s continuous monitoring tools aim to uncover such threats early, from zero-day vulnerabilities to suspicious behaviour patterns. In total, the analysis uncovered 37,457 vulnerabilities in countries currently involved in armed conflict.
India, due to Kashmir-related tensions, ranked high on the exposure list, followed by Russia, Israel, Ukraine, Palestine, and Pakistan. Even basic vulnerabilities like phishing vectors and weak certificates can serve as entry points for state-sponsored cyber groups.
Understanding and managing these risks requires deep and ongoing intelligence. In today’s cyber insurance environment, political geography and digital security are inextricably linked.
Read the full blog from KYND here.
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