The MENA region is entering a new phase of natural catastrophe (Nat CAT) exposure, forcing both insurers and reinsurers to re-evaluate underwriting strategies, portfolio diversification, and the resilience of their risk frameworks.
The 2023 Turkiye-Syria earthquake, unprecedented floods in Dubai, and the recent wave of wildfires across North Africa have sent a clear message: Nat CAT events in the region are no longer isolated or rare. Driven in large part by climate change, the frequency and severity of extreme events are rising—and the traditional assumptions underpinning risk pricing and capacity allocation must now shift.
In response, several global reinsurers have begun to reclassify parts of the Middle East as emerging Nat CAT hot spots. This has led to a tightening of capacity, upward adjustments in reinsurance pricing, and stricter underwriting terms—particularly for property catastrophe exposures.
For primary insurers, this reassessment is already impacting treaty renewals and facultative placements. The challenge lies in balancing higher reinsurance costs with limited pricing flexibility in local markets, many of which remain underpenetrated and highly price-sensitive.
The region’s comparatively low insurance density also means that when events strike, the economic losses are largely uninsured. This not only exposes policyholders but creates broader macroeconomic risk—fuelling demand for more comprehensive coverage and risk-transfer mechanisms.
As traditional indemnity-based insurance models come under strain, parametric solutions are gaining ground. Insurers in countries such as Morocco, the UAE, and Jordan are actively exploring parametric solutions, especially for agriculture, SME and infrastructure risks. For reinsurers, this presents an opportunity to partner with local carriers on scalable, tech-driven risk solutions that bridge the protection gap.
However, for parametric models to scale effectively, accurate and localised data is essential. Investment in satellite analytics, weather stations, and real-time monitoring will be critical. Regulatory frameworks must also evolve to recognise and support non-traditional insurance structures.
A major takeaway from recent disasters has been the lack of preparedness—not just in insurance coverage, but also in physical infrastructure and public awareness. Insurers must push for better integration of catastrophe risk modelling into urban planning, zoning, and building codes. Too often, flood-prone developments or wildfire-vulnerable zones are underwritten without adequate mitigation strategies.
For insurers and reinsurers operating in MENA, recent events should serve as a strategic inflection point. This is the time to rethink risk, recalibrate pricing, and reimagine solutions that go beyond the traditional model. The Nat CAT threat is no longer theoretical—it’s a present and growing reality.
The next phase of growth in the region will depend not just on capital, but on creativity, collaboration, and climate-conscious underwriting. Those who adapt quickly will lead the way in building a more resilient and insurable future for the region. M
Ahmad Zaki
Editorial director
Middle East Insurance Review