Moody’s: Iran War Insurance Losses — Currently Manageable

Moody’s isn’t too worried about the risks for global specialty insurers operating in the Middle East. The ratings firms says if the conflict doesn’t last very long — weeks instead of months or years — large, diversified insurers will be okay.

If the conflict stretches out, the likelihood of bigger and more complex losses will be experienced.

“While the conflict in the Middle East is increasing geopolitical and specialty insurance risks, we expect that losses are likely to be manageable for well-diversified insurers unless hostilities become more prolonged or escalate significantly,” Moody’s said in its analysis.

War exclusion clauses will also help protect many insurers. However, legal challenges might come along when an insurer enacts one.

Moody’s notes speciality insurance companies will no doubt experience losses from missile and drone attacks in the Strait of Hormuz where marine, aviation and political violence losses could be felt.

Marine insurers are the most exposed.

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