How The Iran War Is Affecting Your Insurance

The war in the Middle East is affecting South Africans adversely in a number of ways – we are seeing inflation starting to rise and a spike in investment market volatility. But another way it is affecting consumers’ pockets, possibly with a longer-term impact, is its disruption of the global insurance industry.

Geopolitical conflicts terrify insurers. There are the obvious direct risks, such as billion-dollar oil tankers being blown out of the water, the destruction of buildings and infrastructure in the affected regions, and environmental damage from oil spills. But there are also indirect risks, such as the disruption of air traffic, trade routes and goods supply chains.

Ryno de Kock, head of distribution at PSG Insure, says all insurers include war-clause exclusions in their policies, which are designed to exclude financial losses arising directly or indirectly from acts of war. “These exclusions exist because war‑related losses can be catastrophic in scale and threaten the long‑term financial viability of insurers,” he says.

De Kock says that, in the context of the current conflict, insurers are likely to reassess exposures linked to affected regions, key shipping routes and airspace. South African businesses shipping goods to and from the Middle East will be immediately affected, either through war-clause exclusions or the price of cover going up.

Knock-on effects for the consumer are inevitable. The prices of imported goods are likely to rise for a number of reasons, but consumers may also see their own personal lines insurance premiums starting to rise.

Speaking to News24 about his company’s six-month results to the end of 2025, OUTsurance Group CEO Marthinus Visser said the war may have an inflationary impact on vehicle insurance premiums. He said premiums had been trending downwards because of fewer accident claims, but the Iran conflict might reverse this trend – the disruption of trade routes and supply chains would likely push up the prices of goods that insurers cover, such as car parts. Visser said that although the industry was able to absorb some cost increases in the short term, the impact on the consumer would depend on how long the war continued.

Travel insurance

When it comes to insurance for travellers, any losses resulting from flight disruptions, airspace closures or travel restrictions linked to geopolitical conflict would typically be excluded.

“Most standard travel insurance policies contain broad war and conflict exclusions,” De Kock says. “This means cancellations, delays, rerouting, and additional accommodation costs arising directly or indirectly from acts of war or military action are generally not covered.”

In other words, if the war has forced you to rebook a flight or extend your accommodation, your expenses will probably be for your own account.

De Kock says that insurance remains an important tool for managing uncertainty, but its effectiveness depends on policyholders understanding both the protection provided and the limits that apply under certain circumstances.

Global insurance rethink

Looking at the insurance and reinsurance industry globally, the reassessment of risks connected to geopolitical events marks a fundamental shift. Sandra Sithole and Raynold Tlhavani, partners at Webber Wentzel, say that geopolitical conflict, once regarded as a peripheral risk, has migrated to the centre of mainstream insurance concerns.

“The wars in Ukraine and the Middle East and the ripple effects of sanctions regimes have collectively redrawn the risk landscape for insurers across multiple lines of business. For South African insurers, geopolitical risk may appear geographically distant. However, South Africa’s deep integration into global trade flows, its reliance on international reinsurance capacity, and its exposure to commodity price volatility mean that these conflicts carry real and material consequences for local insurers, their policyholders, and the broader financial services sector,” Sithola and Tlhavani say.