Over the past month, the word ‘tariff’ has been thrown around repeatedly, part of US President Trump’s ‘America First’ agenda. There were major reactions on stock markets all around the world, with the Gulf region seeing losses and Saudi Arabia’s primary stock index dropping by 0.3%. The Egyptian pound dropped by 2% within days of the tariff announcements, its sharpest drop since 2023, and caused its inflation rates to climb even higher.
Despite the 90-day pause, countries such as Egypt and Jordan, both long-standing trade allies of the US, have already felt the economic harm from these tariff changes, and repairing that damage will take a very long time and a lot of political goodwill.
Honestly, I am not an expert on trade or financial markets, and I cannot tell you what the expected predictions are on markets or commodities. But I do know is that these changes to global trade will affect prices of things, which means that people who have already been struggling with a cost-of-living crisis will continue to suffer even more.
We all also know that when people struggle financially, one of the first things they drop is insurance – it is seen as a luxury, and sometimes an unnecessary expense. Amidst the current slew of risks like climate change and geopolitical tensions, the insurance industry now also has to deal with an uncertain financial forecast and a potential widening of the protection gap.
Of course, I am very certain that (re)insurers will be able to overcome these issues, handily. They have, after all, lived through more impactful events, and came out of it relatively unscathed. In the MENA region, the continuing expansion of FDI limits will also allow the region’s insurers to learn from their global counterparts.
This, I believe, is the main factor to surviving these unprecedented times. While the US is putting ‘America First’, other nations are turning to each other for help and support. Since the announcement of the sweeping changes to US tariffs on all foreign imports, there has been a flurry of activity from every single affected country, all of them attempting to minimise the disruption to their own economies, brokering new trade deals and strengthening alliances and partnerships.
The insurance industry has long known that partnerships have been the most important ingredient to success, especially in the long-term. After all, insurance in itself is a ‘people’ business, and the most successful (re)insurers treat their business as a partnership between insurer and customer.
The next few months will be difficult, and interesting. But as long as the industry continues to put people and partnerships first, we’ll be able to come out on the other side of it just fine. M
Ahmad Zaki
Editorial director
Middle East Insurance Review