How Marine Insurance Changed After the Hormuz Crisis
Tensions in the Strait of Hormuz — a key chokepoint for global oil and LNG trade — have become a stress test for the global marine insurance market. According to Howden Re, the conflict has caused an "extreme level of pressure" on the marine hull war, cargo war, offshore energy, and political violence segments, leading to a sharp rise in premiums, reduced coverage availability, and logistics restructuring. howdenre.com
Premiums Have Multiplied: Market Enters 'War-Pricing' Mode
Immediately after the escalation, insurers expanded high-risk zones and raised rates for transiting the Strait of Hormuz.
Key changes:
- Sharp increase in war-risk premiums — insurers raised rates several times in response to attacks on vessels and infrastructure; howdenre.com
- Mass policy cancellations and shift to voyage-by-voyage insurance; Maritime London
- Heightened sensitivity of rates to geopolitics — prices change almost daily. Argus Media
According to Howden Re, the market has faced "the strongest stress" due to rising losses, uncertainty over future claims, and risk accumulation. howdenre.com
Route Restructuring: Traffic Through Hormuz Collapses
Shipping through the strait has sharply declined — according to Howden Re, global oil flows fell by more than 60% after the conflict began. howdenre.com
Consequences:
- Tankers and container ships are taking alternative routes via the Arabian Sea;
- Delivery times increase by 3–7 days (market estimates);
- Operating costs rise due to longer distances and additional security measures.
This directly impacts freight rates and cargo insurance costs.
Insurers Tighten Underwriting and Reduce Coverage
Insurance companies have strengthened risk controls and begun selectively restricting policy availability.
Trends:
- Expansion of JWC (Joint War Committee) zones — in the March 2026 update, Bahrain, Djibouti, Kuwait, Oman, and Qatar were added, and zones in the Persian Gulf, Gulf of Oman, Indian Ocean, and Red Sea were expanded; Argus Media
- Tightened conditions: higher deductibles, mandatory notifications, additional safety requirements;
- Reduced P&I coverage for risks related to political violence and infrastructure attacks. Maritime London
Insurers fear loss accumulation and prolonged, multi-layered claims — especially after major infrastructure incidents the market has already experienced. howdenre.com
Cargo Insurance: Rate Hikes and Selectivity
The cargo war segment has also come under pressure.
Changes:
- Rate increases of 10–40% depending on cargo type (market estimates);
- Stricter requirements for packaging, documentation, and routes;
- Increased selectivity — insurers refuse cargo related to energy and chemicals if the route passes through Hormuz.
According to Howden Re, the cargo war market is in a state of "extreme stress" due to uncertainty over future losses. howdenre.com
Macro Effect: Inflation Risks and Pressure on Global Insurance
Analysts warn that the crisis's consequences extend far beyond marine insurance.
According to Howden Re:
- Prolonged disruption of oil supplies through Hormuz raises the risk of a new inflation wave;
- This could lead to central bank rate hikes, higher cost of capital, and reduced insurance capacity;
- The macro effect may be more significant than direct losses from vessel damage. Maritime London
Conclusion: Market Becomes More Expensive, Stricter, and Less Predictable
The situation around Hormuz has become a turning point for marine insurance:
- Premiums have multiplied;
- Coverage has shrunk and become more fragmented;
- Underwriting has tightened;
- Routes have been restructured;
- Risks for global trade have increased.
The market remains functional but operates in a mode of heightened caution and high volatility. howdenre.com