Willis, the broking business of WTW, has launched a global defense and security initiative that brings together its specialists across regions and lines of business to serve defense contractors, suppliers and security firms.
The initiative gives clients a single route into Willis’s risk transfer, risk advisory and analytics, cyber, crisis management, claims, risk engineering, operational resilience, workforce risk, and capital and transaction advisory services across 140 countries. It is led by Jennifer Caldarella (pictured), Willis’s global defense lead.
“The defense and security sector is entering one of the most significant investment cycles in its history. But investment alone does not create capability,” Caldarella said.
Willis said global military spending reached nearly $2.9 trillion in 2025 and could rise to between $4.7 trillion and $6.6 trillion by 2035. The world’s 100 largest arms producers earned a record $679 billion in arms revenue in 2024.
But the broker said more money doesn’t automatically produce more capability. Major US defense programs take more than 12 years on average to deliver initial capability. Contractors face cyber, supply chain, regulatory, contracting and operational risks that can delay or derail delivery, often while insurance capacity is limited.
The sector is also changing quickly. Drones, autonomous maritime technology, AI-enabled systems and advanced digital capabilities are reshaping military operations, and a new generation of technology-led companies is bringing different business models and risks. Willis said traditional risk management wasn’t designed for many of these exposures.
The launch comes as US defense spending rises sharply. Fiscal 2026 defense funding totaled about $1 trillion, combining $838.7 billion in regular appropriations with $150 billion from the One Big Beautiful Bill Act passed last summer.
In April, the White House proposed $1.5 trillion in defense spending for fiscal 2027, a 44% increase. That is made up of $1.15 trillion in discretionary funding and $350 billion that the administration wants Congress to pass through a new reconciliation bill, according to the Center for Strategic and International Studies. Congress has yet to agree the final figure, and the reconciliation portion faces political opposition.
Much of the proposed increase is aimed at exactly the areas Willis highlights. The request includes $76.3 billion for munitions procurement, up from $26.8 billion in fiscal 2026, more than $100 billion in investment in the defense industrial base, and $54.6 billion for larger unmanned systems. Combined procurement and research and development funding totals nearly $757 billion.
For US commercial brokers, the spending surge brings both opportunity and complexity. Manufacturers, technology firms and contractors moving into defense supply chains for the first time will face contractual insurance requirements, higher limits, cyber security standards such as the Pentagon’s Cybersecurity Maturity Model Certification, and new liability exposures, particularly in drones, autonomous systems and AI.
Demand is likely to grow for surety, products liability, cyber, aviation, marine and political risk cover. Expanding production of munitions and energetics also raises property and casualty questions for plants and their neighbors.
Large global brokers are positioning to win this business. Mid-sized and regional brokers with manufacturing and technology clients will need to understand defense contract requirements, including flow-down insurance clauses and government contractor indemnities, to avoid losing those clients as they move into the sector.
