In discussions held on the sidelines of the Society of Insurance and Financial Analysts conference, re/insurance executives and analysts took a cautiously constructive approach to conflict risks in the Middle East, with the general consensus that re/insurers’ related losses to date remain “manageable.”
Overall, sentiment suggests losses are contained, with analysts noting that “the situation remains fluid” but that most exposures are well understood and generally retained by major insurers.
Autonomous said war losses related to the Iran conflict continue to evolve, although the risks are well understood in a region where the conflict is not new.
KBW, meanwhile, highlighted that the sectors most directly affected were specialty lines, particularly “political violence, marine and trade credit”, with shipping disruptions leading to “significant increases in rates” for marine insurance.
So far, however, executives generally view insured losses from the conflict in the Middle East as very manageable, although losses remain unquantifiable as events continue to unfold, and few are concerned about their current level of risk, according to KBW.
“Iran’s sanctioned status limits insurance benefits there; losses related to Israel have been modest, and the war exclusion provides meaningful support across most commercial sectors. Still, the situation remains fluid and we are cautious given the geographic scope and unpredictable trajectory of the conflict,” KBW added.
Meanwhile, RBC Capital Markets analysts said potential losses were likely in naval and specialty commercial lines, but stressed that for most insurers, exposures were described as “immaterial” or limited in size.
Goldman Sachs similarly described exposures as generally manageable, noting that while losses could occur, they tended to be limited by policy structures that required separate war insurance coverage.
Goldman Sachs added: “Among the companies we cover, we believe potential exposures are held primarily by reinsurers and larger specialty insurers. Areas of exposure include war, political violence and terrorism, ship hulls and energy, and other business lines.”
From a credit perspective, Moody’s said the short-term impact on Gulf insurers should remain limited under a baseline scenario in which the conflict is relatively brief.
The main risk transmission channel is expected to be through investment portfolios rather than underwriting performance, as geopolitical shocks could put pressure on asset prices linked to regional economic activity.
In related commentary, S&P recently said that reinsurers’ capital adequacy is sufficient to mitigate the potential risk of a deterioration in credit quality, although those companies with a broad geographic footprint in the region and significant exposure to specialty markets may be most affected.
In addition to its full-year 2025 results, global reinsurer SCOR said the direct impact of the ongoing Middle East conflict in terms of claims would be negligible, with CEO Thierry Léger stressing that the reinsurance industry “can rise to such challenges”.
Post-conflict risks in the Middle East are considered manageable for reinsurers, but concerns about escalation remain.
