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3. The Chaos of Insurance Against War Risks

Lebanon is under fire, and insurance premiums against war risks are reaching historic peaks. Reinsurers adjust the prices of premiums in real-time, responding instantly to changes in the intensity of the fighting on the ground. What is valid at one moment may no longer be so a few hours later. It’s chaos.

Renewing war risk insurance policies in Lebanon is not straightforward. Extending them is often complicated, and sometimes the reinsurer outright refuses, considering the risks to be at an unsustainable level, explains an insurer speaking anonymously to This Is Beirut. According to him, there is no reference for evaluating the risk premium, as prices are estimated on a case-by-case basis.

During the Gaza war, premium prices were acceptable. However, they have soared in recent weeks with Hezbollah opening a front in southern Lebanon.

In response to the question of who compensates the client in the event of a loss, another industry professional explains that, even if the reinsurer does not pay, the insurer remains fully responsible for their commitments to the insured, as the contract is with them. The insured, on their side, has no direct contractual link with the reinsurer.

War Risk and Health Insurance

Medical procedures related to war are covered by standard health insurance policies, provided the insured is neither a combatant nor directly involved in hostilities. By a government decision, the Ministry of Health is supposed to cover the medical expenses of those injured during acts of war.

Insurance premiums have increased significantly, rising from three to four dollars to seven, eight, or even nine dollars in response to the escalation of hostilities.

Regarding life insurance policies, reinsurers take a firm stance: no coverage for human losses. They have stopped offering new life insurance policies during the war, but those subscribed to before the onset of hostilities remain valid until their expiration.

Maritime Insurance

The demand for war risk liability insurance, which is one of the main coverages for maritime transport professionals (freight forwarders, shipowners, charterers, etc.), as well as for industrial and trading companies, remains high. However, the conditions for issuing such policies have become stricter.

If the goods are not loaded onto the ship, the war risk liability insurance policy is automatically unilaterally canceled. A new policy will then be issued, accompanied by a higher premium and stricter conditions.

This category of insurance policy protects operators, direct asset losses (goods), as well as the legal consequences (liability) of actions involving their assets in a war context, it is noted.

Of course, the final say rests with the reinsurers when setting the terms governing the issuance of an insurance policy.