"Insurance Premiums for Middle East-Bound Ships to Rise by Up to 50%"[US Iran Airstrike]

“Trend Shifts Toward Price Renegotiation Rather Than Coverage Refusal”

As tensions rise in Middle Eastern waters following the U.S. attack on Iran, specialized war insurance companies have reportedly begun raising their premiums. Logistical costs for ships passing through strategic oil trading points such as the Hormuz Strait and the Gulf are expected to increase significantly.

Hormuz Strait. Photo by Yonhap News Agency

According to the Financial Times (FT) on February 28 (local time), war risk insurers have collectively issued cancellation notices for existing coverage contracts on vessels passing through major oil chokepoints following the U.S. attack on Iran. The intention is to first invalidate current coverage terms and then renegotiate contracts at increased premiums that reflect heightened war risk. Currently, Gulf voyage insurance premiums, which are around 0.25% of ship replacement costs, are expected to rise by up to 50%.

In particular, underwriters are closely monitoring the possibility that Iran may close the Hormuz Strait. Insurers are reportedly recalculating premiums with the possibility in mind that Iranian proxy forces could attempt to seize vessels in the surrounding waters. Cargo insurers covering raw materials such as grain and oil have also begun terminating contracts in succession.

Within the shipping industry, there are predictions that insurers will opt for renegotiation at much higher prices rather than refusing to provide ship coverage outright.

This content was produced with the assistance of AI translation services.