Explore how the escalating US-Iran-Israel conflict is reshaping insurance practices for South African businesses, highlighting the importance of understanding war exclusions and sanctions in a volatile global landscape.
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The escalating conflict involving the US, Iran, and Israel highlights the impact geopolitical instability can have on global trade and, by extension, South African businesses and their insurance cover, says Ryno de Kock, head of distribution at PSG Insure.
According to De Kock, geopolitical conflicts have a direct implication on how insurers assess risk, particularly where trade routes, sanctions, and war‑related risk exposures are concerned.
“All insurers include war clause exclusions in their policies for acts of war such as invasions, military action, insurrections, and terrorism. These exclusions exist because war‑related losses can be catastrophic in scale and threaten the long‑term financial viability of insurers," says De Kock.
According to Santam’s 2025 Insurance Barometer Report, which surveyed 881 South African consumers, corporates and intermediaries, insurers are increasingly adapting to interconnected risks that include geopolitical instability, sanctions, and global trade disruptions. The report confirms that businesses and households are facing a more complex risk environment, where global conflicts are directly shaping local insurance practices and costs.
De Kock explains that while these exclusions are often overlooked during periods of relative global stability, they become critically important when conflicts escalate and draw in multiple state actors, as is currently the case in the Middle East. War and exclusion clauses are a standard feature across most commercial insurance policies and are designed to exclude financial losses arising directly or indirectly from acts of war or war‑like events and instability.
However, De Kock notes that in the context of the current conflict, insurers are likely to reassess exposures linked to affected regions, key shipping routes and airspace. “Once a conflict reaches a certain level of intensity or geographic spread, insurers may withdraw or restrict cover in those regions. This can leave businesses exposed where they assume cover remains in place, particularly for cargo, marine, and transit risks," he says.
South African businesses involved in importing or exporting goods are among the most vulnerable to financial losses. Heightened military activity in certain regions can increase the risk of disruption to major shipping lanes, airports, ports, and logistics hubs, which can have implications for existing marine insurance arrangements.
De Kock warns that businesses trading through or near conflict‑affected regions may find that war cover is cancelled or significantly restricted, increasing their exposure to loss or damage in transit. “Where war exclusions apply, losses may no longer be considered as unforeseen,” he explains. “This means claims linked to conflict-driven events could be rejected, even if the loss occurs far from South Africa.”
Beyond physical risk, international sanctions play a major role in shaping insurance responses to geopolitical conflict. De Kock points out that most policies include sanction limitation and exclusion clauses, which prevent insurers from providing cover or paying claims if doing so would breach sanctions imposed by bodies such as the United Nations or allied jurisdictions. “In a conflict involving the US and Iran, sanctions are a key concern,” he says. “If a claim payment or policy exposure places an insurer in contravention of international sanctions, they are legally prohibited from responding.”
This is particularly relevant where sanctions are imposed after a shipment has already commenced. In such cases, even valid claims may not be payable if settlement would breach sanction regulations. The ongoing conflict is not only affecting trade and supply chains, but it can also have an impact on travel insurance, with several South African travellers reportedly stranded overseas. According to De Kock, this comes down to the same principle that applies across commercial insurance: war is almost always excluded.
“Most standard travel insurance policies contain broad war and conflict exclusions. This means that cancellations, delays, rerouting, and additional accommodation costs arising directly or indirectly from acts of war or military action are generally not covered," he says.
He explains that many travellers assume travel insurance will respond to any unexpected disruption, but geopolitical conflict is treated very differently from operational delays or weather‑related events.
“When airspace is closed, flights are grounded, or borders are affected due to military conflict, insurers view this as a systemic war risk rather than an individual, unforeseen incident. As a result, travellers may find themselves responsible for additional costs such as new flights, extended accommodation, or alternative transport," he says.
De Kock urges both South African businesses and travellers with international exposure to review their insurance arrangements carefully and engage proactively with their advisers.
“Insurance should not be treated as a static product, especially in a rapidly changing geopolitical environment. Understanding how war exclusions, sanctions clauses, and territorial limitations apply is critical to managing risk proactively," he says.
He adds that informed planning and early engagement can help reduce uncertainty and prevent unexpected gaps in cover.
“In times of heightened global tension, insurance remains a vital risk management tool. But it only works effectively when policyholders understand its limits as well as its protections," De Kock says.
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