The ongoing Middle East conflict is significantly impacting business costs and operations across Australia and New Zealand (ANZ), with New Zealand businesses showing higher vulnerability than their Australian counterparts. A recent survey by Chartered Accountants Australia and New Zealand (CA ANZ) reveals that finance and accounting leaders in both nations are grappling with increased costs, heightened uncertainty, and widespread supply chain disruptions directly attributable to the crisis.
The survey, which polled nearly 700 CA ANZ members, found that eight out of ten respondents are experiencing rising costs, while six out of ten reported greater risk and uncertainty in their business decision-making processes. Nearly half (49%) of the respondents indicated that their organizations or clients are facing supply chain disruptions directly linked to the conflict. Overall, 61% of respondents acknowledged direct exposure to the economic repercussions of the conflict, with New Zealand reporting a higher exposure rate of 68% compared to Australia’s 55%. A further 21% stated that it is still too early to fully quantify the impact.
Among those affected, higher energy costs were the most frequently cited impact, reported by 77% of respondents. Other significant effects included supply chain disruption (46%), increased production costs (40%), shipping and freight delays (40%), and exchange rate volatility (36%). New Zealand respondents reported a greater susceptibility to shipping and freight disruptions, with 48% citing delays compared to 32% in Australia.
Ainslie van Onselen, CA ANZ chief executive, emphasized that the conflict is having a tangible local impact across various industries, including manufacturing, retail, agriculture, logistics, and healthcare. “This is not a distant crisis. It is landing on Australian and New Zealand businesses right now, and our members are seeing it firsthand across every sector of the economy,” van Onselen stated, urging government attention to the concerns of CA ANZ’s 140,000 finance professionals.
Many organizations are currently in an assessment phase rather than implementing detailed response plans. Approximately half of the survey respondents are monitoring developments cautiously, without yet putting specific strategic, capital spending, or risk management measures in place. About one in five respondents anticipate increasing prices in response to conflict-related pressures, with this expectation being more prevalent in New Zealand (24%) than in Australia (17%), suggesting potential divergence in pricing strategies between the two markets. Professor Richard Holden, CA ANZ chief economist, warned that elevated energy prices are permeating broader cost structures, affecting everything from food to freight and manufacturing, thereby exacerbating existing pressures on businesses and households.
When questioned about effective government interventions, respondents primarily highlighted two areas: investment in infrastructure to bolster supply chain resilience (52%) and direct support for energy costs (50%). Damian Ogden, CA ANZ group executive for advocacy, public, and government affairs, called for governments to adopt longer-term strategies rather than addressing each disruption in isolation. “Government cannot keep governing crisis to crisis. Fuel security, reliable energy, and resilient supply chains are the foundations a modern economy runs on. It is time to strengthen them,” Ogden asserted.
These findings from CA ANZ align with Aon’s “Q1 2026: Global Insurance Market Overview,” which indicates that geopolitical risks, particularly the Middle East conflict, are influencing underwriting approaches across numerous insurance classes. Aon reports that the conflict is already impacting marine, aviation, cyber, political violence, trade credit, property, and financial lines. Property underwriters are now focusing more on operational disruption for entities with Middle East operations or indirect exposure via trade routes and supply chains, leading to reviews of territorial definitions, sanctions clauses, hours clauses, and contingent business interruption provisions.
In financial lines, Aon observes that underwriters, already contending with increased claims activity and complex risk profiles, are intensifying scrutiny on governance, disclosure practices, and business continuity arrangements. The goal is to ensure that pricing, coverage, and structures are aligned with evolving geopolitical exposures. Insurers are reassessing aggregate exposures, adjusting capacity, and revisiting terms, with increased underwriting scrutiny, longer placement timelines, and shifting positions on coverage and pricing as potential claims scenarios evolve.
The survey results and market analysis underscore an environment where rising input costs, supply chain disruptions, and currency volatility converge with stricter policy reviews and evolving underwriting criteria. Aon’s report suggests that insurance markets often serve as an early indicator of emerging risk trends. Therefore, how organizations engage with insurers and brokers, present their risk profiles, and structure their programs could significantly influence outcomes regarding coverage, wording, and limits.
Aon advises insureds to anticipate continuous adjustments in policy wordings, pricing, capacity, appetite, and claims positions as the conflict progresses. It recommends actions such as mapping exposures beyond physical locations, reviewing contracts and sanctions implications, stress-testing supply chains, reassessing risk transfer structures, and examining assumptions about policy responses in various scenarios.
Joe Peiser, CEO of Risk Capital at Aon, urged insureds to proactively examine their insurance programs. “Now is the time to test assumptions, before events force the issue. Periods like these can expose assumptions that haven’t been stress tested: how policies respond under geopolitical pressure, where coverage ends and balance sheets begin, and whether alternative structures are needed to preserve resilience,” Peiser concluded, emphasizing the importance of early action to navigate uncertainty effectively.
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