Reinsurers in MEA region operating with strong capital buffers – GlobalData

Mubasher: The current conflict in the Middle East is prompting reinsurers to rapidly reprice and recalibrate risk across many lines, with continuity of coverage and trade as primary objective, even amid rising instability, according to GlobalData.

Reinsurers in the Middle East and Africa (MEA) region are generally operating with strong capital buffers, said Insurance Analyst at GlobalData, Manogna Vangari.

“However, they face severe challenges in specialty lines, including marine, aviation, political violence, energy, and trade credit,” according to the analyst.

If the war continues for an extended period, it will impact the revenue growth of top reinsurers in the region over the next few years.

Vangari noted: “Their responses so far have been defensive: demanding higher premiums, tightening terms, and reducing capacity. While immediate risks are manageable as long as conflict remains limited in scope and duration, a prolonged or escalated scenario could place serious stress on reinsurance markets and local insurers across the region.”

GlobalData said that in the Gulf region, near‐term rate increases for the marine hull line are projected between 25% and 50%, while some underwriters have already canceled annual hull war policies under standard seven-day war clauses.

However, in response to growing war risks and reinsurers’ refusal to cover risks in the region, the US established a major reinsurance facility in March 2026 through the International Development Finance Corporation and the US Treasury Secretary, under which it will provide up to $20 billion in maritime reinsurance, including war risk, in the Gulf region. This is expected to ease reinsurance capacity in the region.

Vangari added: “Alongside these challenges, reinsurers are investing in AI to enhance underwriting and pricing, and increasingly adopting AI-powered tools to assess risk and improve operational efficiency. Additionally, regulatory shifts in the region are pushing for greater use of technology.”

The analyst said: “For instance, Saudi regulators now require more robustness in operational risk and data management, which strengthens the case for adopting AI and digital tools.”

GlobalData’s MEA reinsurers database reveals that in 2024, premiums reached $4.40 billion, which represented 1.10% of global reinsurance premiums. Over the 2020–2024 period, they achieved around a 7.10% compound annual growth rate (CAGR).

However, the US-Israel and Iran war is expected to have a major impact on the MEA reinsurers’ operations, as the war’s effect is dual; direct exposure in or near conflict zones raises loss potential and pricing risk, and indirect effects like higher reinsurance costs, global capital movement, inflation put upward pressure on premiums.

Vangari noted: “In 2024, the MEA reinsurance market was heavily concentrated among a few major players, with the top five reinsurers capturing 64.10% of total premiums.”

The analyst further said: “African Re solidified its market leadership, increasing its share from 25.20% in 2023 to 27.20% in 2024. Reinsurers based in the Middle East accounted for 20.70% of premiums, with Saudi Re, Kuwait Re, and Oman Re collectively contributing 15.70%.”

GlobalData concluded by saying that innovation is no longer experimental, as modular policies, microinsurance, embedded insurance, and parametric triggers are gaining mainstream traction.

Collaboration among insurtechs, fintechs, regulatory bodies, and alternative capital providers is accelerating the development and rollout of these offerings.

If reinsurers successfully navigate regulatory, data, and operational hurdles, they stand to significantly expand their reach, relevance, and resilience in a rapidly evolving risk landscape.

Source: Mubasher Source: {{details.article.source}}