Gulf Firms Seek Millions In Political Violence Coverage Amid Rising Tensions

Companies across the Gulf are rushing to purchase political violence insurance as regional fighting intensifies, seeking protection for major infrastructure and commercial properties against the growing risk of attacks and collateral damage, according to FT.

Insurers and brokers say they have received hundreds of inquiries in recent days from asset owners looking for coverage that protects against war-related threats. The policies typically cover damage caused by terrorism, missile debris, civil unrest, strikes, riots and other forms of political instability.

Demand has surged as the conflict in the Middle East expands, with Iran and allied groups launching missile and drone strikes against Israel and nearby countries following a joint U.S.–Israeli bombing campaign. Investors and businesses in Gulf states including Saudi Arabia and Oman are increasingly concerned about the possibility that the violence could spill over into neighboring economies.

Industry experts say the financial impact of the conflict could be unusually large. Fergus Critchley, global head of terrorism and political violence at broker WTW, warned the current crisis could produce losses “significantly larger and more catastrophic” than those seen in recent years.

FT writes that much of the new demand is coming from Western companies operating in the Gulf, which insurers say are often considered more likely targets. Raj Rana, who leads war and terrorism coverage at broker Bowring Marsh, said his firm alone has fielded more than 50 requests for political violence coverage since last weekend.

Requests have come from a range of sectors, including renewable energy and hospitality. Solar projects in Saudi Arabia and hotels in Bahrain and Qatar have all sought protection as companies worry about both direct attacks and indirect damage such as falling shrapnel from intercepted missiles.

Digital infrastructure has also faced threats. Drone strikes this week targeted data centers operated by Amazon in the United Arab Emirates and Bahrain, according to security experts who suspect Iranian involvement. Microsoft said its regional operations had not been disrupted.

Some businesses in the region already carried terrorism insurance before the conflict escalated. However, brokers now recommend broader political violence coverage, which also protects against unrest such as riots, strikes and civil disturbances.

The surge in demand has pushed premiums sharply higher. Insurers say prices rose early in the week to several times their previous levels. Previously, coverage for political violence on an energy project in Saudi Arabia or the UAE could cost less than 1 percent of the insured value. By Thursday, the cost had climbed to roughly five times that rate. For example, securing $10 million in coverage for a $20 million project could now cost about $500,000, compared with under $100,000 before the latest escalation.