Wall Street Is Gaining Access to New Catastrophe Models to Help Predict Wars

Wall Street firms and risk consultancies like Verisk are developing predictive machine-learning models to forecast wars and geopolitical conflicts, as the number of countries in external conflicts has nearly doubled since 2008 to over 100, costing the global economy nearly $22 trillion. Citigroup and Morgan Stanley have warned that traditional historical risk models are no longer adequate, particularly for events like trade blockades and sanctions that alter entire probability distributions. The focus on war risk modeling, including threats to oil transport chokepoints like the Strait of Hormuz, signals growing investor and insurer demand for forward-looking geopolitical risk tools.