Impact of Armed Conflict in the Middle East on Global Insurance Sectors: A Focus on Maritime, Land, and Air Transportation

Abstract

The Middle East has long been a geopolitical flashpoint, but the recent intensification of armed conflicts—including the Gaza War (2023–present), Houthi attacks in the Red Sea (2021–2024), and broader instability across the Levant and Arabian Peninsula—has generated unprecedented disruptions to global supply chains. This article examines the cascading effects of these conflicts on the global insurance industry, focusing specifically on three critical transportation modes: maritime, land, and air. Using a mixed-method approach combining secondary claims data, industry reports, and risk modeling, we demonstrate that war risk premiums in the Red Sea have surged by 500–900%, land cargo insurance in conflict-adjacent corridors (e.g., Iraq-Jordan-Turkey routes) has seen coverage withdrawals, and aviation hull war insurance has expanded into secondary conflict zones. The paper introduces two original analytical charts: (1) "Trends in Maritime War Risk Premiums, Red Sea vs. Global Average (2022–2024)," and (2) "Reallocation of Global Insurance Capital Following Middle East Escalation (Q1 2022 – Q4 2024)." We conclude that the insurance sector is undergoing a structural re-pricing of geopolitical risk, with long-term implications for captive insurers, reinsurance capacity, and supply chain resilience. Recommendations for risk managers, underwriters, and policymakers are provided.