Reinsurers based in the Middle East and North Africa (MENA) region are facing a mix of challenges and opportunities, according to a new report from AM Best.
The analysis highlights increased natural catastrophe activity, fluctuating oil prices, geopolitical tensions, rising public debt, and high inflation as key hurdles for MENA reinsurers.
While reinsurers in the region have benefited from positive pricing trends in recent renewal periods, the extent of these gains has not matched those seen in the broader global reinsurance market.
AM Best previously noted that rising natural catastrophe losses and inflation continue to shape the outlook, requiring MENA reinsurers to adapt their pricing and risk modeling to account for a growing frequency of weather-related events, such as floods and earthquakes.
The report finds that the region continues to attract new reinsurance capacity. It also points to positive pricing momentum and expanding primary insurance markets as factors supporting ongoing opportunities for reinsurers in the region.
The United Arab Emirates, in particular, is projected to see re/insurance sector growth of up to 20% in 2025, following a 21% increase in insurance revenue in 2024. This expansion is attributed to digital innovation, strategic realignments, and a resilient response to last year’s record-breaking floods.
Despite insured losses from the floods estimated between US$2.9 billion and US$3.4 billion, UAE insurers ended 2024 on a strong financial footing, with premium increases and improved risk frameworks supporting the sector’s stability.
Firm pricing in the MENA reinsurance sector is generally in line with global trends, reflecting elevated claims inflation and a recent uptick in both large man-made and weather-related losses.
The current hard market, along with strong underwriting discipline and more refined risk appetites, has benefited market participants. However, local macroeconomic conditions and shifting geopolitical dynamics are playing a larger role in shaping market outcomes.
Weather-related losses, such as the April 2024 floods in the UAE and the February 2023 earthquakes in Türkiye, have had a significant impact on property, engineering, and energy lines of business for MENA reinsurers. These events have prompted many reinsurers to review their reinsurance structures and increase retentions, as well as refine their approach to catastrophe risk.
Geopolitical risk in the region increased notably in early 2025, with heightened security concerns affecting how insurers and reinsurers assess country risk. According to the report, the direct impact on the insurance industry is expected to be limited, in part due to war exclusions and narrowly defined policy triggers.
Reinsurers are expected to remain cautious, seeking to manage geopolitical volatility through asset and underwriting diversification, maintaining sufficient liquidity, and regularly reviewing their exposure to high-risk assets.
The report notes that while the operating environment for MENA reinsurers is challenging, the market remains dynamic, with abundant capacity and ongoing opportunities for those able to navigate the region’s evolving risk landscape.
What are your thoughts on this story? Please feel free to share your comments below.
