Nigerian insurance companies are likely to face higher reinsurance costs as a result of disruptions caused by the ongoing conflict in the Middle East, according to industry experts.
Reinsurance companies play a key role in the global insurance market by providing insurance for insurance firms.
When reinsurers incur large losses or face increased uncertainty, they may adjust pricing for coverage, which can affect primary insurers in other regions.
The ongoing geopolitical conflict in the Middle East has affected risk assessments and pricing in the reinsurance sector, which participates in underwriting large‑scale risks worldwide.
Experts at a recent insurance industry gathering in Lagos said the conflict’s impact on the global reinsurance market could spill over to markets including Nigeria.
They explained that major reinsurers had suffered losses from claims related to the conflict and this could lead to changes in pricing and terms for reinsurance treaties.
The experts noted that Nigerian insurers depend on reinsurance support from global markets to cover large risks, including oil and aviation portfolios.
Speakers at the event said reinsurers may revise terms of engagement, pricing and retention levels as they reassess global risk exposures.
They pointed out that higher prices for reinsurance capacity could influence cost structures for primary insurers.
Officials from the Nigerian Insurers Association said the group is monitoring developments in global reinsurance markets.
