Rethinking asset insurance in the Gulf

When the cost environment shifts faster than insurance policies are reviewed, balance sheet resilience becomes an open question

Resilience in the Gulf context has always been understood in strategic terms: diversification, long-term infrastructure investment, and the forward-looking commitments embedded in national visions across the region. But the convergence of forces now reshaping the Middle East—including recent geopolitical tensions, disruptions to shipping through the Strait of Hormuz, tariff-driven commodity inflation, and significant oil price volatility—is creating a risk that deserves greater attention than it is currently receiving: a quietly widening gap in property, plant, and equipment insurance coverage.

Buildings, machinery, and equipment: A triple exposure

The insurance adequacy challenge facing Gulf businesses is not limited to buildings and structures. Machinery, industrial equipment, and specialist plants are often among the highest-value assets on a fixed asset register, and they carry their own distinct reinstatement risk.

For businesses operating processing facilities, manufacturing plants, or energy infrastructure across the Gulf, the replacement cost of key equipment items may have moved materially since the last valuation was conducted. A resilient organization accounts for this.

According to Marsh's Global Insurance Market Index, commercial insurance rates in the Middle East region fell by 10% in the fourth quarter of 2025. For risk managers, this looks encouraging. But a softening premium is only beneficial if the sum insured remains accurate across all asset classes.

A moment for appropriate and proactive review

For decision-makers, the question is not whether assets are insured—most are. The question is whether the sums insured reflect the world as it stands today.In light of this, it is increasingly important to proactively assess the sum insured. An accurate replacement cost assessment helps ensure adequate and cost-effective coverage. In a period of compounding cost pressures, this proactive review can make the difference between building resilience or allowing it to be quietly eroded.

By Muhammad Faiq Khalid, Partner, Valuations & Modeling, and Suzette Clingerman, Director, M&A, Deloitte Middle East