South Korea is introducing emergency measures for small and medium-sized enterprises (SMEs) with exposure to Middle East markets as the latest regional conflict increases operational and insurance risks across energy, marine, and credit lines. The Ministry of Trade, Industry, and Resources (MOTIR) said emergency export vouchers for SMEs with Middle East business will be available from this week.
According to The Korea Times, the vouchers – to be administered by the Korea Trade-Investment Promotion Agency (KOTRA) – are intended to offset additional costs such as return shipping and higher war-risk surcharges on cargo and vessels. KOTRA will also extend marketing assistance to help exporters identify buyers in alternative markets. The measures are expected to address potential revenue disruption for firms that may need to reroute shipments or suspend sales into higher-risk jurisdictions.
Separately, Korea Trade Insurance plans to provide an emergency financial aid package for SMEs exporting to economies around the Strait of Hormuz, including the United Arab Emirates, Saudi Arabia, Iraq, Qatar, and Iran. The ministry said it will coordinate with other agencies to “minimise risks for Korean companies” if the crisis continues and market access remains constrained. The initiatives indicate a larger public-sector role in exporters’ liquidity and risk transfer at a time when counterparty risk and payment delays in the region are under closer review.
In a separate assessment, Allianz Trade said the conflict is creating a more complex operating environment for energy, marine, and credit insurers as shipping disruption and elevated oil prices work through claims costs, balance sheets, and investment portfolios. In its report, “Conflict in the Middle East: Implications for markets and macro,” Allianz research described the situation as a “non-linear geopolitical shock,” with the main transmission channel running through the Strait of Hormuz. The waterway handles around 30% of global seaborne oil flows and a significant share of liquefied natural gas shipments.
Following recent strikes and retaliatory attacks, spot oil prices briefly climbed to about US$82 per barrel, roughly 13% above the prior close, and shipping data showed more than 200 oil and LNG carriers waiting outside the strait as war-risk premiums and operational safeguards increased. Under the report’s central case, in which the conflict is contained within weeks, Allianz expects oil to average about US$85 per barrel in 2026, with temporary moves toward US$90 before easing back to about US$70 to US$75 as conditions stabilise.
In a “prolonged conflict” scenario involving repeated blockages or damage to key facilities, it said Brent prices could rise above US$100 and potentially test US$120 to US$130 per barrel before settling. Marine hull and cargo underwriters are monitoring higher exposure to physical damage, loss of hire, and delay losses in and around the Strait of Hormuz. War-risk writers are seeing increased demand and tighter wordings, while energy insurers focused on offshore platforms, refineries, and pipelines in the Gulf are watching for any shift from short-term disruption to sustained infrastructure damage.
Allianz Trade’s analysis highlights inflation as a central channel for insurers, particularly in property and casualty lines that are sensitive to fuel, materials, and labour costs. In its baseline scenario, keeping oil in a range of roughly US$80 to US$90 per barrel would add about 0.1 to 0.2 percentage points to headline inflation in the euro area and the US in the short term. On its own, this would not be expected to change central banks’ main policy paths, but it could extend cost pressures in construction, transportation, and manufacturing.
For P&C carriers in Asia and elsewhere, that backdrop points to further claims inflation in motor, commercial property, and business-interruption covers, where energy and input prices feed directly into repair costs and loss-of-income calculations. In a more adverse scenario where oil prices stay closer to US$100 for a prolonged period, Allianz sees upside inflation risk of around 0.5 percentage points. That could delay interest-rate cuts by the Federal Reserve and European Central Bank, with knock-on effects for insurers’ investment income, solvency metrics, and asset-liability management.
The report suggests that, under its baseline, the current episode is primarily a volatility shock rather than a full supply breakdown. Even so, sector differences may influence underwriting appetite, especially for Asian carriers with significant exposure to trade credit, surety, marine, and energy risks. Energy producers outside the Gulf region and integrated oil majors with trading operations could see higher cash flow and margins, which may support credit quality for some insureds.
By contrast, airlines, petrochemical producers, heavy manufacturers, and logistics operators face margin pressure as fuel, feedstock, and freight costs increase. Trade credit and surety writers may reassess limits or terms for weaker balance-sheet names in these industries if financing conditions also tighten. Allianz also notes the impact of higher bunker costs and war-risk surcharges on freight rates, which it estimates could rise by 15% to 25% on some routes. That dynamic can lift insured cargo values and increase the risk of underinsurance if sums insured are not adjusted. Marine liability underwriters may need to account for altered navigational patterns and potential congestion as vessels reroute to avoid high-risk waters.
On the asset side, Allianz expects financial markets to orient around a “rapid stabilisation” baseline while remaining prone to episodes of volatility driven by geopolitical headlines. The report questions whether nominal government bonds will continue to act as reliable portfolio hedges in a supply-driven inflation setting. In its central case, Allianz projects 10-year US Treasury yields gradually moving back into a 4.5% to 5.0% range, with German Bunds in the 3.0% to 3.5% range, as central banks keep policy rates on hold for longer before easing. Higher yields support reinvestment income but can pressure unrealised bond valuations and regulatory capital in the near term. Equity markets, particularly US technology names, are seen as sensitive to either a longer period of high rates or a sharper slowdown in growth. In downside scenarios, Allianz sees scope for substantial drawdowns driven by multiple compression and weaker earnings, affecting insurers with sizable equity or unit-linked portfolios.
The report identifies infrastructure as showing relatively stable performance across both higher-growth and lower-growth inflationary environments. Allianz’s baseline assumes around a 10% positive return from infrastructure in 2026, compared with mid-single-digit returns for equities and lower yields for investment-grade bonds. However, in a severe downturn, it warns that private-debt spreads could widen from roughly 500 basis points to as much as 650 basis points as investors reassess risk in more leveraged sectors. For Asian insurers that have increased allocations to infrastructure debt and equity or private credit, these dynamics suggest that while such assets can reduce exposure to short-term price swings, they remain exposed to sustained energy shocks and broader macroeconomic weakness, particularly where borrowers operate in energy-sensitive segments such as chemicals and packaging.
Taken together, the Korean government’s SME measures and Allianz Trade’s scenario work indicate that, if contained, the conflict is assessed as limited in macro impact under the baseline scenario but will still test insurers’ risk management. Immediate priorities include monitoring accumulation in and around the Strait of Hormuz, reassessing trade credit and political risk exposures linked to Middle East counterparties, and reviewing sums insured and wordings in marine and energy books. On the asset side, investment teams face a combination of higher yields, potential equity volatility, and evolving views on the hedging role of sovereign bonds. The overall impact for insurers in the region will depend on the duration and geographic spread of the conflict and on the timing and design of policy responses intended to address geopolitical and inflationary spillovers.
