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Lebanese insurance companies have long been active in the Syrian market, establishing a presence decades ago when Hafez al-Assad’s regime opened the door to private sector activity. However, international sanctions forced most to withdraw, as the market became too risky.
Today, any move to re-enter Syria is considered premature, according to a source in the insurance sector interviewed by This is Beirut. “At least two conditions must be met: major reinsurers must agree to operate there, and dollar transfers to and from Syria must be allowed,” said the source.
US sanctions under the Caesar Act remain in effect, added the source. Syrian Economy Minister Mohammad Nidal al-Shaar expressed hope in a Tuesday interview with Reuters that “US sanctions against Syria will be officially lifted in the coming months.”
A Promising Market
Despite the challenges, Lebanese insurers are positioning themselves to tap into the Syrian market, which holds significant potential. Demand is particularly strong for policies covering technical reconstruction, engineering works, and complex construction projects. These contracts, commonly known as “engineering and liability insurance” or “construction and civil engineering insurance,” protect against property damage, support post-disaster reconstruction, and often provide coverage for civil liability associated with the projects.
“Fronting” Insurance: A Strategic Tool
An industry professional interviewed by This is Beirut said that “things are moving in Syria,” referring to the recent signing of major engineering and liability insurance contracts structured as fronting. In this arrangement, a local company issues a policy on behalf of a foreign insurer without retaining the primary risk. The local firm essentially serves as the official face to comply with national regulations, while the risk is transferred to the foreign insurer through reinsurance. Fronting is therefore primarily a regulatory and commercial tool rather than a true transfer of risk within the local market.
Geographical Proximity: A Strategic Advantage
While other regional markets such as Dubai, Abu Dhabi, Saudi Arabia, or Egypt are attractive for their growth potential, they remain out of reach for many companies. Lebanese insurers must commit tens of millions of dollars in equity to meet local requirements. In addition, regulators impose strict standards for governance, compliance with international norms, and above all, provisions and liquidity.
“A market like Syria remains easier to enter and, importantly, much closer to Lebanon,” said a sector source, highlighting a clear geographic and operational advantage.
Lebanese Companies Remain Active
Despite the ongoing turmoil, some Lebanese insurers, including Arope, Adir, Arabia and UCA, have opted to maintain their operations in Syria. Western sanctions forced them to deconsolidate their balance sheets in Lebanon and manage the depreciation of the Syrian pound, yet they continue to issue insurance policies across all sectors.
To safeguard their operations, these companies primarily rely on reinsurance from the Arab Union Reinsurance Company, a joint venture between Syria, Libya and Egypt founded in 1974, and from Syria Re, established in 2004. Syria Re has further strengthened partnerships with Russian and Iranian reinsurers, including Rosgosstrakh and Alborz Insurance Company, to mitigate the impact of Western sanctions.
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