Marine insurers in the London market continue to offer cover in the Middle East, despite rising war risk premiums driven by escalating conflict in the Gulf, insurance broker Gallagher’s Marine Divisional Director Angus Blayney said on Wednesday.
Rates have increased depending on vessel type, cargo and routing, Blayney said, as round-the-clock attacks by U.S. and Israeli forces on Iran, and Tehran’s retaliatory missile and drone strikes, show no sign of abating.
The Strait of Hormuz, a critical oil export chokepoint linking Gulf producers such as Saudi Arabia, Iran, Iraq and the United Arab Emirates to the Gulf of Oman and Arabian Sea, remains at the center of the conflict’s commercial impact. Iran controls the narrow waterway.
“Given the challenging maritime security environment, rates have increased from levels that owners and charterers will be used to,” Blayney said.
“The cost will vary depending on the vessel type, cargo and routing, however marine insurers are very much continuing to provide cover and helping to ensure vital marine commerce continues uninterrupted with adequate coverage in place.”
Gallagher said capacity remains available through Lloyd’s of London for clients seeking cover, and that in recent days it has secured marine war risk solutions for numerous existing and new clients.
At least 200 ships, including oil and liquefied natural gas tankers as well as cargo vessels, were at anchor in open waters off the coasts of major Gulf producers including Iraq, Saudi Arabia and Qatar, according to Reuters estimates based on ship-tracking data from MarineTraffic.
U.S. President Donald Trump said on Tuesday the U.S. Navy could begin escorting oil tankers through the Strait of Hormuz if necessary. He added he had ordered the U.S. International Development Finance Corporation to provide political risk insurance and financial guarantees for maritime trade in the Gulf.
Companies including Gard, Skuld, NorthStandard, the London P&I Club and the American Club said their cancellations would take effect from March 5, according to notices dated March 1 on their websites.
War risk cover will be excluded in Iranian waters, as well as the Gulf and adjacent waters, according to the notices.
Skuld added in its notice that it was working on a buy-back option to reinstate cover.
Japan’s MS&AD Insurance Group told Reuters it had suspended underwriting of a range of insurance policies covering war risks in the waters around Iran, Israel and neighboring countries.