S&P Global Ratings (S&P) expects the conflict in the Middle East to inject additional uncertainty and earnings volatility into global reinsurers' 2026 results, particularly within specialty lines.
That said, the global reinsurance sector entered 2026 with excellent capitalisation. S&P expects the industry’s capital adequacy to further strengthen at year-end 2025 compared with the already robust levels at year-end 2024, underpinned by the strong earnings performance.
Direct asset exposure of global reinsurers to the Middle East remains limited, and S&P believes reinsurers' capital adequacy is strong enough to mitigate the potential risk of credit quality deterioration stemming from the conflict. For most of the top 19 global reinsurers S&P rates, asset exposure to the region is not material. However, on the liability side, reinsurers face potential losses affecting their earnings.
Insured losses
S&P believes there will be sizable insured losses, and the conflict could have far-reaching implications for the reinsurance industry. However, the ultimate magnitude and impact on the reinsurance sector remain highly uncertain at this point and will depend largely on the duration, scale, and evolution of the conflict. Given how fluid the situation is, the loss development could unfold over weeks or even months.
At this stage, S&P sees several reinsurance lines exposed to increased volatility and potential losses, including specialty classes such as marine, aviation, energy, political violence, terrorism, and cyber, as well as property exposure in affected areas and policies covering supply chain or trade disruption. Marine insurers have already begun cancelling war-risk coverage applicable to the conflict zone, including the Persian Gulf and adjacent waters. Reinsurers with broad geographic footprints and meaningful exposure to specialty markets in the Middle East are those most likely to be affected.
Resilience
S&P believes capital adequacy will remain a key strength of the sector and continue to demonstrate resilience under severe stress scenarios, including geopolitical shocks such as the present conflict.
S&P‘s view of the global reinsurance sector remains stable, supported by the industry's solid capital position, disciplined underwriting, and sophisticated enterprise risk management.