Tensions in the Middle East are already impacting the global insurance market. In particular, Marine Hull insurance rates in the Gulf region may rise sharply in the short term, with early estimates pointing to increases between 25% and 50%.
This development follows military action on February 28, 2026, when the United States and Israel struck Iranian military targets. Iran responded with missile and drone attacks on U.S. bases and regional allies. As a result, insurers, reinsurance companies, and shipowners are reassessing risk exposure across several insurance lines.
Why Marine Hull Insurance Rates Are Increasing
According to Dylan Mortimer, UK War Leader for Marine Hull at Marsh, rate increases for Marine Hull insurance in the Gulf could reach 25% to 50% in the near term.
However, he cautioned that if merchant shipping comes under direct attack, war insurance rates could rise even further.
The situation remains fluid. Military build-up in the region has created uncertainty, and crews operating in affected waters are understandably concerned. Underwriters are therefore reassessing pricing, coverage terms, and exposure limits.
Also Read: Black Sea War Risk Insurance Surges 250% After Ship Attacks
Strait of Hormuz: A Critical Shipping Route Under Pressure
The Strait of Hormuz plays a crucial role in global trade. It connects the Persian Gulf to the open ocean and handles over 14 million barrels of oil per day.
Following the recent escalation:
- Insurers have reportedly issued cancellation notices under standard 7-day war clauses.
- Some underwriters have withdrawn annual hull war policies.
- Over 200 vessels have dropped anchor in the region.
- War risk premiums are being reviewed on a voyage-by-voyage basis.
The Financial Times reported that insurers informed shipowners they may cancel coverage or significantly increase premiums for vessels transiting the Gulf and the Strait of Hormuz.
The primary risks include:
- Vessel boarding or seizure by Iranian forces
- Missile or drone strikes
- Potential closure of strategic waterways
Bab el-Mandeb and Broader Regional Risk
Risk is not limited to the Gulf alone. The Bab el-Mandeb has also come under scrutiny.
Shipping giant Maersk temporarily paused sailings through Bab el-Mandeb and the Strait of Hormuz. At the same time, marine insurer Skuld cancelled certain war risk coverages.
Skuld highlighted a tightening reinsurance market. Reinsurers are reducing their appetite for war-related exposures, which could lead to sudden capacity withdrawals.
Meanwhile, General Insurance Corporation of India (GIC Re) announced it will withdraw marine hull war risk cover in several high-risk global regions, according to reports from CNBC-TV18.
Underwriters Are Repricing — Not Withdrawing Entirely
According to Stephen Rudman, Head of Marine Asia at Aon, the market reaction has been swift.
Underwriters are:
- Withdrawing or revising quoted additional premiums (APs)
- Reinstating cover at significantly higher rates
- Applying stricter underwriting scrutiny
- Requiring prior approval for sensitive voyages
Importantly, these changes relate mainly to war risk extensions. Core Hull & Machinery and Protection & Indemnity (P&I) coverage generally remains intact unless specifically altered.
Rudman noted that the hull war market reacted quickly due to aggregation exposure and capital sensitivity. Additional premiums for vessels transiting high-risk waters are rising sharply and may continue to fluctuate.
Cargo war risk insurance remains available, but:
- Rates are increasing
- Quotes are reviewed voyage-by-voyage
- Energy and bulk commodity shipments face closer scrutiny
So far, the market is repricing risk rather than withdrawing capacity entirely. However, a significant escalation, such as sustained conflict or major vessel loss, could trigger further rate corrections.
What Shipowners and Charterers Should Do Now
In this volatile environment, marine stakeholders should take proactive steps:
- Review war cancellation provisions within existing policies.
- Engage brokers early before fixing voyages in high-risk areas.
- Assess charterparty war clauses and premium allocation terms.
- Factor potential additional premium volatility into freight pricing and commercial planning.
Active communication with brokers and insurers is essential. Markets in London and internationally are closely monitoring developments.
Broader Insurance Market Impact
The geopolitical shock is not limited to Marine Hull insurance. Other affected lines include:
- Aviation insurance
- Property insurance
- Travel insurance
- Supply chain coverage
Investment portfolios may also face pressure due to increased regional instability and volatility in energy markets.
For marine insurers and reinsurers, war risk exposure remains highly sensitive. Reinsurance constraints are playing a significant role in premium adjustments.
What This Means for the Future of Marine Hull Insurance
If tensions ease, rates may stabilize. However, if conflict expands or commercial vessels suffer direct attacks, the market could see:
- Significant war risk premium spikes
- Short-term capacity withdrawal
- More restrictive underwriting conditions
- Increased use of voyage-specific approvals
For now, the Marine Hull market is in a phase of rapid repricing driven by heightened geopolitical risk.
Also Read: Markel Group Promotes Leaders and Restructures Operations
Company Profile: Marine Hull
Marine Hull is a specialist insurance provider focused on protecting shipowners and maritime operators against physical damage to vessels. The company off ers:
- Hull & Machinery insurance
- War risk extensions
- Additional premium (AP) coverage for high-risk areas
- Tailored solutions for global shipping routes
With expertise in underwriting complex maritime exposures, Marine Hull works closely with brokers, reinsurers, and shipping companies to deliver risk-adjusted pricing and structured coverage solutions. Its approach emphasizes disciplined underwriting, capital protection, and proactive risk monitoring in volatile regions.
As global trade routes face increasing geopolitical uncertainty, Marine Hull continues to adapt its underwriting strategy to safeguard clients navigating high-risk waters.
