Global specialty property and casualty (P&C) insurers have largely contained losses from the ongoing Middle East conflict, with direct financial impacts remaining manageable in the first quarter of 2026, according to a new report by Morningstar DBRS.
The report assessed insurance-related losses across the industry as the conflict approached its third month and the Strait of Hormuz remained closed to normal shipping traffic. It found that while standard P&C insurance policies generally exclude war-related cover, a subset of insurers known as specialty underwriters, which explicitly cover war, marine, aviation, and energy risks, bore the brunt of direct losses.
Munich Re reported the largest disclosed loss among the firms examined, recording approximately $106m (€90m) in claims. “Claims arising from the Iran war came to approximately €90m for Munich Re – with around €60m attributable to Global Specialty Insurance and approximately €30m to property-casualty reinsurance,” the company said.
Everest Group reported $90m in pre-tax catastrophe losses that it said were “driven primarily by losses associated with the Iran War and a number of mid-sized events globally”, while Markel Group recorded $35m attributed to the Middle East conflict, adding two percentage points to its combined ratio.
Smaller specialty firms were also affected. Convex Group cited “about a $23 million add-on for the Iran war”, and International General Insurance reported $15m in losses, including a $10.5m energy loss linked to a vessel collision with an offshore platform after GPS and lights were switched off amid the fighting.
Reinsurance giant Swiss Re reported no material direct claims but set aside a $400m reserve for potential inflationary impacts related to the conflict. Hannover Re said it had received limited claim notifications and that it was “not yet possible to come up with reliable estimates”.
Morningstar DBRS noted that Lloyd’s of London, which dominates the global marine war-risk insurance market, stated in a May 14 market message that it did not expect the conflict to become a capital event.
The report cautioned that a prolonged conflict could generate further losses. It warned that ships trapped in the Strait of Hormuz for 12 months or more could trigger constructive total loss claims, even if the vessels remained undamaged. Rising energy-driven claims inflation and softening premiums in broader P&C lines were also flagged as potential pressures on future earnings.
Despite these risks, the report described the conflict as both a loss event and a pricing opportunity for specialty writers, noting that elevated war-risk premiums and growing demand for political risk, trade credit, and energy cover represented a financial tailwind, provided losses remained within expectations.
