Kathmandu. The Iran war is likely to affect reinsurance capacity in the Middle East.
Atul Boda, chairman of JB Boda Group, said that the Middle East tensions are having a significant impact on insurance and reinsurance companies. Because risks are increasing, hostilities are intensifying, and reinsurance capacity is decreasing.
Middle East tensions are in their fourth week and neither side shows signs of backing down. As a result, the insurance and reinsurance industry is facing a period of uncertainty. “Aviation, maritime, energy, political risk, and business credit lines are experiencing rapid repricing, lower limits, and increased use of structured solutions,” Boda said. ’
Reinsurance Industry Problem
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The protracted dispute can mean that reinsurance costs can increase for some business lines. Maritime insurance and reinsurance companies, on the other hand, have withdrawn coverage for ships operating in conflict zones. As a result, the risk to ship owners and charterers has increased.
India’s national reinsurance company, GIC Relay, has withdrawn sea hull war risk cover from conflict zones. Boda said reinsurance companies are re-evaluating their past capacity, overall risk and capital deployment. “For the global insurance and reinsurance community, the challenge is to manage volatility, maintain capital adequacy, maintain underwriting discipline, and provide viable risk transfer solutions without undermining market confidence and sustainability during a long geopolitical risk cycle with volatile economic conditions,” he added. ’
JB Boda Group is an Indian multinational reinsurance brokering house with a significant presence in the AENA (MENA) sector. It has offices in Dubai, Egypt and Morocco. –Agency
