Iran war spikes political violence insurance premiums 20-fold

• Gulf premiums 20 times higher
• As much as $120,000 a year
• More companies seeking cover

Gulf insurance premiums to cover political violence have risen at least 20-fold since the US and Israel launched a war on Iran, the world’s largest insurance broker told AGBI.

Political violence insurance coverage encompasses multiple events including war, terrorism, civil unrest, revolution and counter-insurgency.

Such cover in the Gulf is typically provided for large corporations and infrastructure inlcuding power stations, real estate development projects and shopping malls, said Omar Gemei, head of global placement for India, the Middle East and Africa at Marsh.

Now though, small and medium-sized companies are increasingly seeking such insurance, he said: “The political violence market has been in a very big state of flux over the past two months.”

That period spans the Iran war, which began on February 28 and spiralled into a broader Middle East conflict until a fragile ceasefire on April 8 paused hostilities.

Before the war, insurers had committed about $1 billion in capacity to Gulf political violence insurance premiums. Figures from Marsh, the world’s largest insurance and reinsurance broker by revenue, show that after the war started capacity providers slashed this coverage to about $200 million.

Capacity refers to the maximum amount of risk an insurer or reinsurer is willing and able to underwrite. Gemei said that the capacity reduction, combined with “an exponential increase in demand… resulted in significant price increases”.

Before the war, a $1 million political violence insurance policy in the Gulf would cost $1,000 to $2,200 a year. Now the same cover costs $20,000 to $120,000, Gemei said.

He added that if things continue to stay stable “those rates hopefully will soften, but I don’t think it will go down to the same levels [as] before the conflict”.

The surge in Gulf political violence insurance prices runs counter to prevailing trends in the global and regional insurance industry.

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Worldwide, premiums on average fell 5 percent in the first three months of 2026, Marsh estimates.

In the Middle East, Africa and India, the decline was even more pronounced, falling 10 percent on average and by 5 to 20 percent depending on several factors including industry and insurance category, plus the individual client and its claims history.

“Generally speaking, it’s a great time to buy insurance,” said Gemei.

He foresees further declines in Gulf insurance premium prices this year.

“There’s plenty of insurance capacity in the region and globally,” he said.

“There’s high competition for business, especially if it’s well-managed risk and [the client] has a good claims history. That trend will continue unless there’s some outlier kind of event. It’s going to continue being a buyer’s market for insurance.”