Middle East Insurance Market Faces War Risk Challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 19 2026
0mins
Source: CNBC
- Coverage Discrepancies: Many businesses in the Middle East have opted for insurance against terrorism and sabotage while neglecting specific coverage for 'war', which could lead to denied claims during conflicts, thereby jeopardizing financial security.
- Rising Insurance Costs: Due to missile strikes and maritime disruptions in the Gulf region, war risk insurance premiums have surged, prompting many shipping companies to reroute around Africa instead of using the Suez Canal, adding weeks and millions of dollars in fuel costs per voyage, significantly impacting operational efficiency.
- Legal Ambiguities: Although President Trump has refrained from labeling the conflict with Iran as 'war', market participants believe that the specific definitions in policy wording are more critical than political rhetoric, potentially leading to increased disputes over claims and affecting insurers' ability to pay.
- Future Litigation Risks: Legal experts predict a surge in litigation related to the definition of war, as many insurers have paused or restricted new coverage for parts of the Middle East, resulting in higher insurance costs and stricter terms for businesses operating in the region.
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About MRSH
Marsh & McLennan Companies, Inc. is a professional services company in the areas of risk, reinsurance and capital, people and investments, and management consulting. The Company conducts business through two segments: Risk and Insurance Services, and Consulting. It conducts business in this segment through Marsh Risk and Guy Carpenter. Marsh Risk is an insurance broker and risk advisor offering risk management, insurance broking, insurance program management, risk consulting, analytical modeling and alternative risk financing services to a range of businesses, government entities, and individuals. Guy Carpenter is a reinsurance intermediary and advisor providing specialized reinsurance broking, strategic advisory and actuarial services. The consulting segment includes health, wealth and career advice, solutions and products, and specialized management, strategic, economic and brand consulting services. It conducts business in this segment through Mercer and Marsh Management Consulting.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Coverage Discrepancies: Many businesses in the Middle East have opted for insurance against terrorism and sabotage while neglecting specific coverage for 'war', which could lead to denied claims during conflicts, thereby jeopardizing financial security.
- Rising Insurance Costs: Due to missile strikes and maritime disruptions in the Gulf region, war risk insurance premiums have surged, prompting many shipping companies to reroute around Africa instead of using the Suez Canal, adding weeks and millions of dollars in fuel costs per voyage, significantly impacting operational efficiency.
- Legal Ambiguities: Although President Trump has refrained from labeling the conflict with Iran as 'war', market participants believe that the specific definitions in policy wording are more critical than political rhetoric, potentially leading to increased disputes over claims and affecting insurers' ability to pay.
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- Executive Compensation Approval: Shareholders approved the compensation of the company's named executive officers through a non-binding vote, reflecting recognition of the management's incentive structure aimed at attracting and retaining key talent to drive company growth.
- Annual Meeting Webcast: Marsh will provide an audio webcast of the 2026 Annual Meeting on its website tomorrow, enhancing communication with shareholders and increasing transparency and engagement.
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- Global Brand Partnership: Marsh's role as the official risk and insurance brokering partner for Formula 1 enhances its global brand presence, showcasing its commitment to supporting Canadian and Montreal businesses on the international stage.
- Long-standing Service: Since opening its Montreal office in 1914, Marsh has operated across 15 cities with over 3,000 employees, helping Canadian organizations navigate complexity and shape the future, underscoring its leadership in the industry.
- Risk Perspective Series: The collaboration with F1 introduces 'The Risk Perspective' series, which explores risks and decision-making on the Circuit Gilles-Villeneuve, demonstrating how to turn uncertainty into advantage and enhancing Marsh's professional image in the sector.
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- Rising Insurance Costs: Due to missile strikes and maritime disruptions in the Gulf region, war risk insurance premiums have surged, prompting many shipping companies to reroute around Africa instead of using the Suez Canal, adding weeks and millions of dollars in fuel costs per voyage, significantly impacting operational efficiency.
- Legal Ambiguities: Although President Trump has refrained from labeling the conflict with Iran as 'war', market participants believe that the specific definitions in policy wording are more critical than political rhetoric, potentially leading to increased disputes over claims and affecting insurers' ability to pay.
- Future Litigation Risks: Legal experts predict a surge in litigation related to the definition of war, as many insurers have paused or restricted new coverage for parts of the Middle East, resulting in higher insurance costs and stricter terms for businesses operating in the region.
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- Emergence of New Cities: The report indicates that while traditional business hubs like New York, London, and Tokyo remain dominant, emerging cities such as Chennai, India, and Guangzhou, China, are attracting international manufacturing investments and startup capital, reflecting a shift in the global business landscape.
- Growth of City Clusters: The report emphasizes that city clusters like Hong Kong-Shenzhen-Guangzhou and Dallas-Austin-Houston are creating regional innovation strongholds, providing companies with faster deal flow and robust supply networks, particularly in emerging industries, thus driving economic growth.
- Climate Adaptation and Resilience: As nearshoring and climate spending accelerate, cities like Ho Chi Minh City, Vietnam, and Paris, France, are enhancing long-term resilience through climate adaptation measures, demonstrating the importance of rethinking geographic strategies for companies in a globalized context.
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- Intelligent Decision Support: Syndio's AI platform, Syndi™, built on nearly a decade of proprietary compensation data, offers embedded intelligent analysis, and when combined with Mercer's global compensation expertise, enables clients to achieve pay equity more quickly and effectively, enhancing decision transparency and strategic alignment.
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