The biggest global repercussions of the ongoing military conflict in the Middle East include the increased risks of terrorism, spikes in reinsurance prices, fluctuations in financial markets and energy prices, and hikes in compensation costs, according to Mr Khaled Abdel-Sadek, a Vice Chairman of the Insurers Federation of Egypt (IFE).
Mr Abdel-Sadek, who is also the CEO and Managing Director of Al Mohandes Insurance Company, told Amwal Alghad that the impact on Egypt of the conflict is limited in that it would be significant on reinsurance and could generate inflationary pressures on claim amounts and fluctuations in investment returns, with a possible impact on the pricing of properties and major projects.
He predicted a gradual increase in insurance prices for vital and foreign-funded projects, and risks near strategic areas, accompanied by a reassessment of retention limits and a reduction in coverage limits for some special risks.
He said that the most affected insurance branches are aviation, maritime transport, energy and major projects, and war and political risks, while the least affected branches include motor, medical insurance and traditional fire insurance for small risks.
He added that if the escalated conflict were to expand regionally, temporary pressures on solvency and profitability might appear.