A resumption of military confrontation in the Middle East could dampen consumer sentiment and slow growth in the UAE, which might hinder insurers' growth prospects in 2026, said S&P Global Ratings (S&P).
Giving its outlook for the UAE insurance sector in 2026 in the report, "How The UAE Is Adapting To And Recovering From The Effects Of The Middle East War”, S&P added, “On the other hand, there may be higher demand for insurance policies covering war-related risks.”
As such, S&P expects listed UAE insurers' revenue to increase by approximately 10% in 2026, which compares with about 17% year-on-year growth in 2025, when the increase in insurance revenue reached about AED51bn ($13.9bn).
The global credit rating agency expects its ratings on UAE insurers will be broadly stable over the next year. This is thanks to recent robust earnings contributing to significant capital buffers.
S&P said, “We anticipate that the UAE insurance market will maintain robust underwriting results throughout 2026. Rate increases following floods in early 2024, combined with a low level of claims in most of 2025 and into 2026, have supported underwriting profits.
“Most UAE insurers have limited exposure to war-related claims, as standard insurance policies typically exclude these risks.
“Specialised policies that do cover war-related risks are usually fully reinsured in the global market, resulting in low net exposure for local insurers. The UAE market also has a high level of reinsurance usage, typically at 50%-60%. As a result, we expect the emirate's insurers to remain profitable, with a net combined ratio of about 90% per year over the forecast period. Even so, we forecast that return on equity in the sector will decline by 8%-10% in 2026, compared with about 12% in 2025.”