Reinsurers, including Swiss Re have become more willing to provide cover for the Middle East in the industry's January policy renewal season, removing a clause which allowed them to pull out if the Gaza conflict escalated, according to Reuters.
The removal of the restrictive property reinsurance clause predates the emergence this week of a complex ceasefire accord between Israel and militant group Hamas, said the news agency.
It reflects greater competition in the market rather than an improved outlook for the region, one insurance source said.
The reinsurance market has become more competitive after years of a so-called hard market of rising rates and stricter policy terms and conditions, following losses due to wars, a global pandemic and natural catastrophes.
Reinsurance rates dropped by 5% to 15% at 1 Jan renewals for less risky property catastrophe business, broker Guy Carpenter said last month.
Following the war started in Gaza, reinsurers introduced a clause in January 2024 which excludes claims arising from the outbreak of war in Israel and other territories, including Egypt and Iran, according to Thomson Reuters publication The Insurer reported last year.
"There was a clause which was inserted by several of the major reinsurers around the Middle East, the escalation clause effectively allowed the reinsurers to cancel cover for the region if they felt that a conflict had escalated," said Hamish Greenwood, head of crisis management at broker McGill and Partners.