Best's Market Segment Report: UAE Insurers Navigate Geopolitical Tensions Following Strong Financial Year

LONDON--(BUSINESS WIRE)--While listed insurers in the United Arab Emirates (UAE) have delivered improved profitability, regional geopolitical tensions are affecting certain lines of business and investment portfolios, according to AM Best.

In its new Best's Market Segment Report, “UAE Insurers Navigate Geopolitical Tensions Following a Strong Financial Year,” AM Best notes that standard insurance policies in the UAE typically exclude war-related risks, which are instead covered through add-on benefits, for which premium rates have increased substantially as a result of the U.S.-Israel conflict with Iran. UAE insurers generally cede most of this exposure to international reinsurers and any increase in reinsurance costs is expected to be largely passed on to policyholders.

Saad Abbasi, financial analyst at AM Best's London office, and one of the report’s authors, said, “While the direct impact on core underwriting results to date remains limited, the current situation has contributed to some volatility in the local equity market and bond yields, which in turn has affected insurers’ asset valuations and investment income. Moreover, there may be longer-term concerns on real estate valuations should the UAE cease to be attractive to foreign investors and expatriates."

Reviewing the 2025 results, Jessica Botelho-Young, CA, director, analytics, added, “In terms of net profits, the dominance of the top five insurers has seen a decline, with their contribution falling to 72% from 87%. This could be an early sign of a more-balanced industry performance going forward, supported by a well-regulated and risk-based pricing environment. However, the U.S.-Israel conflict with Iran raises some concerns over the sustainability of growth in the UAE insurance market.”

To access a complimentary copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=363974.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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