Middle East and Africa

Written by Jack McAlone

Key developments in 2025

Middle East

During 2025, countries across the Middle East have continued to build – and announce further - ambitious infrastructure projects, aimed at diversifying their economies away from fossil fuel production, and to enable sustainable economic growth. Examples include the expansion of existing cities and the construction of new ones, new transport projects, and renewable energy.

The boom in construction has resulted in a continued demand for a broad spectrum of insurance cover – including construction and operational/ property all risks cover, as well as liability cover for contractors working on the various projects. This potential for growth has been reflected in several MGAs entering the region in 2025.

At the same time, insurers have shown some caution owing to recent natural catastrophe losses in 2024. In its recent market update, the broker, Aon, described property lines in the region as "challenging", and noted the introduction of new sub-limits for NatCat losses. The complexity and scale of some of the projects being undertaken will also increase the potential for substantial claims.

Africa

2025 saw continued growth in the mining sector in Africa, with continued global demand for commodities including copper, cobalt, lithium, platinum group metals, and gold, driven by their uses in products such as electronics and batteries. That demand, combined with Africa's rich supply of natural minerals, has led to the construction of several new mining facilities beginning in 2025 (for example, the Kuvimba Lithium Project in Zimbabwe) and the expansion of existing mines. Meanwhile, the DRC and Mali governments have made agreements with mining companies for the construction of new refining facilities, to benefit economically from more stages of the supply chain being undertaken domestically.

The ongoing growth of mining in the region presents opportunities for insurers to write new business. WTW reported in late 2025 that competition among insurers for business in the sector was fierce, leading to a softening of the market and more flexibility in the terms offered.

Various countries across Africa have also experienced a volatile political climate and civil unrest, creating risks which are changeable and difficult to price in, potentially increasing demand for political violence cover. Further, as the mining industry in Africa continues to grow, a tendency towards "resource nationalism" has been observed, which - depending on the measures taken – could increase commodity prices and, in turn, the quantum of any business interruption claims.

What to look out for in 2026

Middle East

In recent years, there has been significant growth in the construction of data centres, owing to growing demand for cloud computing services and AI. The Middle East has been identified as an area where data centre capacity is projected to grow considerably, with PwC estimating that capacity in the region will triple over the next five years, owing to factors such as a growing population; lower land costs; tax incentives in certain countries (e.g. Saudi Arabia); access to capital; and low power costs. Improved cooling technology has improved the viability of situating data centres within the region's hot, dry climate.

The growth in this area will induce greater demand for construction and operational cover for data centres in the region. While this might present an opportunity for carriers to write business in a growth area, there are also certain risks from an underwriting perspective. Data centres are extremely complex projects, often comprising not just large amounts of advanced computing equipment but also their own power supply (e.g. gas turbines), increasing the potential for costly property damage claims. Furthermore, lead times for replacement components (e.g. data centre-grade memory, transformers) have increased drastically, prolonging outages/ project delays. As data centres use new forms of technology with an uncertain loss record, this will also present challenges regarding pricing.

Africa

In 2026, we anticipate that the risks posed by extreme weather in the region – and the development and take-up of insurance to manage those risks – will remain an important theme. Parametric insurance has been identified by governments and international organisations (e.g. the UNDP) as a potentially effective tool to build resilience to extreme weather in the region.

We expect that parametric insurance will continue to grow in Africa during 2026. In 2025, the South African government announced its intention to look into using parametric insurance to guard against the risk of extreme weather to municipal property, following heavy (and, in a number of cases, uninsured) losses during the floods of 2022. Furthermore, the African Risk Capacity – which enables governments in Africa to obtain parametric cover against natural disasters - has set itself the ambition of protecting 700 million people in Africa by 2034, and we expect that it will continue seeking to expand by seeking further investment from overseas and improved risk modelling.

Should the prevalence of parametric cover continue to grow in the region, this may create demand for reinsurance in the London market and elsewhere. Furthermore, in addition to supporting traditional farming activities, parametric insurance may also play a role in supporting the growth of other areas including solar power – which is seen by many to be of increasing importance given increasing electricity demands in the region and the unreliability of existing infrastructure.