How GCC Insurance Companies Stay Resilient Despite Rising War Risks
RIYADH – Insurance companies across the Gulf Cooperation Council are expected to maintain stable credit profiles despite the ongoing Middle East conflict, with strong capital buffers and limited war-related exposure shielding them from major financial strain, according to S&P Global Ratings.
S&P Global said most rated GCC insurers have sufficient financial strength to absorb near-term shocks because claims linked to the war are either heavily reinsured or excluded under standard policies. The rating agency credited robust earnings in recent years for building substantial capital reserves that provide protection against market volatility.
“We expect that our ratings on GCC insurers will remain broadly stable in the short-to-medium term,” said S&P Global credit analyst Emir Mujkic. “This is thanks to robust earnings generation in recent years, which has contributed to a significant buildup of capital buffers.”
However, S&P Global warned of a potential slowdown in revenue growth for GCC insurance markets in 2026 following years of double-digit expansion. The extent of slowdown will likely depend on the conflict’s duration. S&P Global’s base-case scenario assumes the military confrontation will be relatively short-lived, with the most intense phase lasting two to four weeks, though broader spillovers could extend beyond that period.
The maritime insurance sector faces the most direct impact. London insurers continue offering coverage but at significantly higher premiums depending on cargo type, vessel class, and shipping route. War risk surcharges have added $50 to $200 per Twenty-foot Equivalent Unit to shipments from China, driving up freight costs and contributing to shipping delays.
In response, the US International Development Finance Corporation deployed maritime reinsurance facilities to stabilize commerce in the Arabian Gulf. The facility will insure losses up to approximately $20 billion on a rolling basis for vessels affected by the conflict.
Earlier this month, US-based credit rating agency AM Best said the immediate impact remains manageable for global reinsurers, but warned that a prolonged crisis could challenge the sector’s long-term resilience. The spread and intensity of any further military actions will ultimately determine the financial toll on insurers and shipping industry participants across the region.
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