The peace deal between the US and Iran to end the three-and-a-half-month-long conflict in the Middle East is likely to have a major impact on the insurance and reinsurance markets worldwide.
Industry experts believe that the deal may lead to some short-term price correction, as trade and supply chain pressures ease and shipping and aviation sector operations normalise. With claims from the war yet to be fully ascertained, the insurance industry will have to adopt a wait and watch policy, as the conditions to the peace deal are fully implemented and shipping channels cleared for smooth navigation.
Asian Reinsurance Corporation President & CEO Anil Sant said that the US-Iran peace deal will result in improvements in risk profiles of insurers in the region through alleviation of risks of financial market volatility, energy prices, trade and supply chain disruptions, claims costs etc., even though direct exposure to the conflict was limited.
“The peace deal is positive news; however, it has to be sustainable and any sense of normalcy will take time,” he said.