Beirut explosion: low compensation and a tough climate for insurers and reinsurers

explosions port BeyrouthTwo years after the explosion in the port of Beirut, the number of settled claims remains rather modest.

Insurers and reinsurers are awaiting the end of the investigation into the origin of the disaster to determine their commitment. If it turns out that the explosion was caused by an act of terrorism or war, a large number of claims will be excluded.

According to Am Best, insurers and reinsurers have already set aside provisions for possible expenses related to the explosion. The Lebanese insurance market continues to face a challenging economic environment impacted by the health crisis, the Russian-Ukrainian conflict, the hyperinflation and the strong depreciation of the national currency.

Lebanese insurers are also faced with the challenge of countering the loss of human capital leaving the country. The departure of skilled labor could result in an operational disruption for local insurance companies.

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