Within the political violence (PV) market, executives at Bermuda-based insurer and reinsurer Lancashire said they expect claims that come through the system from the conflict in the Middle East to exceed premiums, while noting that the firm’s exposure to the region is limited and that it sees opportunities to selectively underwrite new business.
During Lancashire Holdings Limited’s Q1 2026 earnings call, Paul Gregory, Chief Underwriting Officer, highlighted the significant political and economic volatility resulting from the war in the Middle East. He noted that a number of Lancashire’s specialty lines of business have exposure to the region and the peril of war.
Gregory said the company’s current exposure in the Middle East is limited and that it sees room to grow amid increasing demand for war coverage. However, Lancashire will underwrite new business in a measured and disciplined way.
He said, “Our position, from an exposure point of view, is very manageable, and we consider ourselves underweight in the region.
“Given this underweight position, it does provide the opportunity for us to underwrite new business which is coming to the market as demand for war coverage increases. We are doing this in a measured and thoughtful way in order to manage our exposure, but also maximise any opportunities where we feel the balance of risk and reward is appropriate.
“So, we will be cautiously selective, but we are open for business, and we will underwrite those risks, and have underwritten more risks since the war began.”
Alex Maloney, Group Chief Executive Officer of Lancashire, added that he expects losses coming through the system to exceed premiums in the PV market.
“You would expect that to come through over the course of this year, and that will probably affect some of the specialty reinsurance placements, the majority of which are done at 1 January.
“You would expect in any class of business where claims are exceeding premiums, there should be some upward movement. Obviously, the continued prolonged situation in the Middle East means people are going to have to re-underwrite those exposures on a more sensible basis,” said Maloney.
