Marsh, one of the world’s largest insurance brokers and risk advisers, has seen a spike in clients’ inquiries for political violence cover in the Gulf after attacks on tankers and oil installations rattled the region last year, an executive said.
“Enquiries have doubled since tanker attacks last summer, so over a period of six months or so,” Gaurav Bhatnagar, managing director and head of Marsh JLT Specialty for the Middle East and Africa, told Reuters on Wednesday.
“Previously clients wouldn’t look at political risk insurance as much, or they wouldn’t look at specific insurers who provide sabotage and terrorism cover, or the political violence cover … suddenly all of those elements have become much more prominent and our clients, the ones more sophisticated in that space, are asking more regularly what protection we can provide.”
Military tensions in the Gulf have risen this month after a top Iranian general was killed in a U.S. air strike and Iran retaliated with missile attacks against American bases in Iraq.
The strikes followed months of escalation which included attacks on tankers in Gulf waters and on Saudi oil sites, including the world’s largest oil processing facility.
Riyadh and Washington blame the strikes on Iran, which denies involvement but has threatened to close the Strait of Hormuz shipping channel in retaliation for sanctions on crude exports imposed by Western powers.
Insurance costs for ships sailing through the Middle East increased last year after the tanker attacks, and industry sources told Reuters this month they expected war risk premiums to rise sharply following rocket strikes in Iraq.
But Bhatnagar said demands for coverage against risks such as sabotage, terrorism, and war, were increasing across various sectors, not only the maritime one.
“This is in the context of real estate, projects we’re working on, deals that are happening, it’s a bundle.”
“The awareness of what previously may not have been something considered under political violence, is definitely something that’s much more prevalent now … particularly if you’re an international investor coming to this part of the world.”
He said Marsh has hired over 100 people in the Gulf over the past six months and that he expected the firm’s operations to grow further in the region, particularly in advisory services, “cyber resilience” and crisis management.
(Reporting by Davide Barbuscia; editing by David Evans)
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