Gulf Insurers Seen Resilient Despite Ongoing Middle East Conflict

Insurers across the Gulf are expected to maintain stable credit profiles despite the ongoing Middle East war, with strong capital buffers helping absorb market volatility and limiting exposure to war-related claims, according to S&P Global Ratings.

In a recent report, the agency said most rated insurers in the Gulf Cooperation Council have sufficient financial strength to withstand near-term shocks. It noted that claims linked to the conflict are typically either reinsured or excluded under standard insurance policies, reducing direct financial risk for companies operating in the region.

However, S&P Global warned that revenue growth across GCC insurance markets may slow in 2026 after a period of strong expansion. Many markets have recorded double-digit growth in recent years, but analysts expect momentum to ease as economic conditions become more uncertain. The extent of any slowdown is likely to vary between countries and will depend heavily on how long the conflict persists.

The findings come shortly after AM Best, another major rating agency, said the immediate impact of the Middle East conflict remains manageable for global reinsurers. At the same time, it cautioned that a prolonged crisis could test the resilience of the sector if claims begin to rise or market instability intensifies.

S&P Global credit analyst Emir Mujkic said the agency expects ratings on GCC insurers to remain broadly stable in the short to medium term. He attributed this outlook to strong earnings in recent years, which have enabled companies to build significant capital reserves. These buffers are expected to play a key role in absorbing potential shocks linked to geopolitical tensions.

Despite the relatively positive outlook, the agency acknowledged that it is still too early to fully assess the financial consequences of the conflict. The situation remains fluid, with uncertainty surrounding both the duration and the wider economic impact of the war.

S&P Global’s base-case scenario assumes that the most intense phase of the conflict will be relatively short, lasting between two and four weeks. Even so, analysts warned that broader spillover effects and intermittent security incidents could continue beyond that timeframe, potentially affecting market sentiment and economic activity in the region.

Earlier in March, S&P Global said in a separate report that banks operating across the Gulf are also expected to remain resilient in the near term, supported by strong financial buffers and stable operating conditions.

The latest assessment suggests that while geopolitical tensions pose risks, the GCC insurance sector remains well-positioned to manage immediate challenges, supported by prudent risk management practices and solid financial foundations.