S&P Global Ratings has warned of impacts on underwriting earnings from the Middle East war.

The conflict will “reverberate widely” for the Asia-Pacific industry, according to the ratings agency.

And while the region’s insurers have capital buffers to absorb investment and underwriting stresses, a “protracted” upheaval to supply chains poses long-term threat, S&P says.

“Supply-chain disruptions may drive higher inflation and increase insurer expenses and claims cost.

“Underwriting margins may erode if pricing fails to keep up with deteriorating claim experience.”

S&P says the war is a “test of risk management capabilities and capital resilience” for the industry.

There is a risk of slower economic growth and weaker household budgets amid a prolonged war.

“An economic slowdown could stifle insurance demand from households and businesses, and it may squeeze insurers’ margins,” S&P said.