Moody's flags risks for GCC insurers

The escalating conflict involving Iran has triggered a sharp surge in war-risk insurance premiums for shipping and aviation across the Gulf, but the overall financial impact on insurers in the GCC is likely to remain limited for now, according to Moody's Ratings.

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The ratings agency said the credit outlook for GCC insurers remains stable in the near term, largely because the conflict is expected to be relatively short-lived. Moody's baseline scenario assumes hostilities will last only a few weeks, allowing navigation through the Strait of Hormuz and regional air traffic to gradually return to normal.

“We expect the near-term credit impact of the Iran conflict on insurers in the GCC to be limited,” Moody's analysts Mohammed Ali Londe and Brandan Holmes said in a report. “Our baseline assumption is that the conflict will be relatively short-lived, likely a matter of weeks, after which navigation through the Strait of Hormuz and air traffic will resume at scale.”