AM Best sees growth opportunities for MENA reinsurers as international reinsurers grow more selective

AM Best's new report, "MENA Reinsurers are Focused on Profitable Growth Opportunities Despite Heightened Geopolitical and Economic Uncertainties", sees solid top-line growth opportunities for reinsurers in the region, along with a steady inflow of new capital, Reinsurance News reported on 12 October. The report does not give measured growth rates. AM Best points to adequate pricing and to specialist lines such as cyber, parametric cover and retakaful. Analyst Fleur Ngassa said "some growth opportunities have emerged" despite uncertain times.

On the conflict involving the US, Israel and Iran, AM Best expects regional reinsurers' direct losses to stay limited because of war exclusions and narrow policy triggers. Demand for war, political violence and terrorism cover has surged, but local reinsurers gain little, since they cede most of that exposure to international markets. If de-escalation fails or disruption in the Strait of Hormuz lasts, AM Best warns that the effects on oil prices, supply chains and inflation would hit global and regional insurers.

Some lines are softening as capacity grows, but AM Best says claims inflation and recent large man-made and weather losses keep pricing adequate. New capacity is coming from start-ups Riyadh Re and Reinsurance Intelligence Quotient. International reinsurers, by contrast, have made their underwriting appetite "more selective" in response to geopolitical tension, so cedants need deeper engagement with the market to secure terms. Since 1 January 2025, Saudi insurers must offer at least 30% of cessions to domestic reinsurers; AM Best says the specific impact of this rule is still unqualified.

Regional reinsurers' issuer credit ratings run from "bbb-" to "a". Over the past year AM Best upgraded two and moved two outlooks from stable to positive, and it expects rating fundamentals to stay resilient. The IMF projects regional growth of 1.1% in 2026.