Gray zone risk in the aviation industry
By Jared Seth, Managing Director, Global Aviation and Space, WTW
The aviation industry is both an attractive target for gray zone activities and a useful vector for gray zone attacks.
For the supporting insurance sector, which relies on precise language, the implications of ambiguous gray zone activities can be challenging. There are three areas of recent concern for aviation insurance: spoofing and jamming of GPS signals, the imposition of aviation related sanctions, and the implications of a nuclear detonation.
Interfering with the signal from a global navigation satellite system, known generally as spoofing or jamming, is an increasingly important tool in modern warfare. Spoofing occurs where an area is blanketed with a fake positional signal that fools an aircraft into thinking it is somewhere that it isn’t, while jamming is simply flooding an area with a signal that overloads other location systems. The primary intention is to disrupt the guidance systems of an enemy missile or military aircraft to degrade its ability to reach its target or destination, but the nature of the technology means that when a jamming or spoofing system is activated, commercial aircraft also become susceptible.
Pilots and aircrew are highly trained and have various back-up systems and manual techniques to verify information as they fly. As such, while there has been a significant increase in GPS spoofing and jamming,1 it has not yet led to a loss event or insurance claim. If an incident does occur there are insurance clauses that could come into play in the event of an incident, but proving culpability will be difficult and the claims process complicated.
At the start of the crisis between Russia and Ukraine, many countries announced sanctions against Russia and its representatives, a move that in most cases included an export ban on all technology, goods and services related to aviation. This included a prohibition on insurance and reinsurance activity for technologies, goods and services moving within or through Russia.
The speed with which the sanctions were imposed meant that the wording from some states wasn’t clear about issues such as whether the prohibited insurance activity related to just domestic flights within Russia or all flights into Russia. Equally, given the global nature of the aviation insurance market, questions had to be raised about the status of airlines domiciled in or operating between third countries that had not put Russia under sanction but insure with companies based in countries where sanctions are in force. It was some time before insurers were able to offer answers.
One of the most concerning aspects of the recent ratcheting of global geopolitical tensions is that in many cases, at least one of the world’s nuclear powers are involved. From an aviation perspective, part or all of the war coverage can be automatically terminated in the event of the hostile detonation of a nuclear weapon or the outbreak of war between two or more permanent members of the United Nations Security Council.
The challenge is that in a world of gray zone activities, will it be universally understood and accepted if either of these events have actually happened? How do you define hostile activity? How do you know if war between two countries has actually started? When does cyber warfare or other hybrid activities tip over into actual warfare?
Equally, in the event of a nuclear detonation, the insurance policy termination clauses could force the grounding of virtually all commercial aviation activity, irrespective of the size of the weapon or how it was deployed.
Despite these challenges, the aviation insurance sector has proved to be capable of recognizing where coverage adaptation is necessary and responding to the increased risk that gray zone conflict can create. As ever, if you have any questions regarding how the changing conditions could influence an insurance policy, then please get in touch with us.
An extended version of this article is available at here: https://www.wtwco.com/en-gb/insights/2024/12/how-can-the-insurance-sector-respond-to-emerging-gray-zone-risk-in-the-aviation-industry
1 The Dangerous Rise of GPS Attacks https://www.wired.com/story/the-dangerous-rise-of-gps-attacks
