Full Capacity: Steering through escalating Middle East conflict

March 7 2026 by

Welcome to Full Capacity, a weekly briefing on all the most important developments of the past week with a personal take on the news from our editor-in-chief, Mithun Varkey, delivered to your inbox every Saturday.   

Change of guard. Berkshire Hathaway Specialty Insurance has appointed Marcus Portbury as regional president for Asia and the Middle East, replacing Marc Breuil, who is retiring after more than 11 years with the US insurer.

Betting on India. QBE Insurance Group will take complete control of its Indian general insurance joint venture, Raheja QBE, after 18 years of being in the market.

The Australian carrier will buy out the 51% shareholding from its Indian partner, Prism Johnson, for US$35.5 million.

Captive power. The Hong Kong Insurance Authority has granted authorisation to the state-owned China National Nuclear Corporation to set up a captive.

CNNC Captive Insurance is the first captive authorised in 2026, bringing the total number of captives based in Hong Kong to seven.

Sealing the deal. Zurich Insurance Group and Beazley have agreed on the termsof a recommended GBP8.2 billion (US$11 billion) all-cash deal under which Zurich will buy the entire issued and to-be-issued share capital of Beazley. The merged entity is expected to generate around US$15 billion in specialty gross written premiums on a pro forma 2024 basis, up from Zurich’s current US$9 billion.

Meanwhile, Mitsui Sumitomo Insurance has completed the acquisition of 15% of WR Berkley Corporation’s shares  pursuant to investment and voting agreements entered into by MSI and the founding family of WRB in March last year.

MSI acquired all the shares on the secondary market from public shareholders, and no shares were sold by WRB or the Berkley family.

Resilient guardrails 

The US and Israeli strikes on Iran and Tehran’s retaliation have escalated Middle East tensions, disrupting shipping lanes and spiking premiums across marine, aviation, and political violence lines – yet war exclusions and controlled exposures are expected to limit immediate claims fallout for the broader market.​​

However, marine and aviation underwriters have acted swiftly to invoke cancellation clauses as seen with P&I clubs pulling Gulf covers effective from Thursday. War cover remains available under specific agreement on a single voyage basis as long as navigation is authorised by governments and flag states.

Reportedly marine hull war rates have surged 50-80%, with P&I clubs withdrawing protection for Iranian waters and the Strait of Hormuz, forcing APAC shipowners to negotiate steep hikes.

Aviation war-risk premiums climb with case-by-case flight approvals near conflict zones; grounded fleets in UAE and Qatar airports heighten missile threats, though Léger highlighted narrow war definitions and pricing mitigate aerial risks.

As we noted in our story earlier this week that although the aviation war market will no doubt be issuing review notices to remove cover the affected countries, following the UK decision last year on the litigation over jets stranded in Russia following the sanctions, those aircraft may already be deemed to be in the grip of a war peril such that war insurers may still be liable for any subsequent loss of or damage to the aircraft.

War remains one of reinsurance’s strongest standard exclusions, shielding primary property and casualty portfolios from broad exposure, as Scor CEO Frédéric-Lambert Léger noted earlier this week.

Where coverage exists – such as specified war inclusions on high-value regional properties or dedicated political violence/political risk lines – these are priced, monitored, and capped, Leger said.

Though political strikes on Gulf ports, refineries, and LNG assets are expected to pile into London markets, threatening systemic multi-line losses if Hormuz disruptions persist.

Rising oil prices also may demand extra capacity. Drawing parallels to the Iran-Iraq war, when Gulf tankers faced rates up to 10% of their value, up from the low single digits typically.

However, as an industry veteran put it to me this week, the market is now well equipped to handle such scenarios.

The industry has experience navigating volatility and is vastly improved since the 1990s, with industry-wide reforms on aggregations, accumulations, worst-case modelling, and solvency standards.

“So you don’t see insurers collapsing these days, which was pretty commonplace in the 1980s and 90s. So it’s a more boring industry, but it’s a better industry for it,” he said.

While the market’s hoping for a quick normalisation, for now, it does seem the guardrails hold firm.

People moves

Howden has bolstered its financial lines team with two big hires –Jennifer Tiang as Asia practice lead in Singapore and Franky Mok as senior director in Hong Kong.

Former Aon APAC CEO George Attard has been given the additional role of global head of analytics for reinsurance solutions.

Lockton has named Aon’s Alex Tilden as head of major corporate accounts practice.

Starr International has hired Danielle An as Singapore head of financial lines.

Do check out our weekly people move round-up to stay up to speed on the most important appointments in the region. 

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