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While Lebanon remains officially neutral in the military escalation between Israel and Iran, it is already feeling the first economic tremors.

Rising regional tensions are starting to weigh on the insurance sector, particularly in maritime and air transport, as well as war-related coverage, all of which rely heavily on reinsurance. Premiums in these high-risk areas are among the first to reflect the impact of a dangerously unstable Middle East.

Lebanon in the Orange Zone: Heightened Risk Under Watch

Lebanon has now been placed in the orange zone by reinsurance firms, according to an industry source who spoke to This is Beirut on condition of anonymity.
This intermediate classification spares the country from being labeled a war zone (red zone) but still acknowledges a high level of risk, which is typical of areas marked by chronic instability or ongoing conflict threats.

This classification is largely based on lists issued by the Joint War Committee (JWC), a London-based body made up of major marine insurance companies, including members of the Lloyd’s Market Association (LMA) and the International Underwriting Association (IUA). The JWC identifies “Listed Areas”—sensitive zones for global shipping—which insurers then use as a benchmark to determine policy terms, deductibles and exclusions.

Amid ongoing regional uncertainty, reinsurers regularly reevaluate their commitments, causing premiums to fluctuate.

“The country could slip into the red zone, signaling extreme risk, if even a single missile were to accidentally strike Lebanese territory,” the same source warns.

Premiums Stable: For How Long?

According to another Lebanese insurer who spoke to This is Beirut, premium increases remain contained for now. He describes the adjustments as “still manageable,” but warns that if the conflict escalates in the coming days, rates could surge sharply.

Some reinsurers have kept their rates steady, while others have implemented moderate hikes, ranging between 5% and 10%.

Premiums for vessels transiting the Strait of Hormuz remain high but stable, with no changes reported to date.

War Risks: Reinsurers Temporarily Suspend Coverage

Several reinsurers announced last Friday that they are suspending all war-risk pricing, not only for Lebanon but also for multiple Gulf countries. While these nations have largely been spared from direct hostilities so far, they are now considered high-risk zones.

This suspension doesn’t signify a total stop to coverage, a sector insider clarified, but rather a temporary pause while the military and geopolitical situation unfolds. Meanwhile, the insurance industry remains on high alert, closely watching how the conflict evolves.