“The primary risks (of escalating hostilities) centre on the Persian and Arabian Gulf, particularly the threat of vessel boarding and seizure by Iranian forces and the potential closure of the Strait of Hormuz,” said Dylan Mortimer, Marine Hull UK War Leader, at shipping insurer, Marsh.
“It is very early to tell at this point, but we would estimate that near-term rate increases for marine hull insurance in the Gulf could range from 25 to 50%, barring any direct attack on merchant shipping, which could have major repercussions across war insurance rates.
“Given the military build-up in the region, crew are far more likely to be concerned than they might have been to previous risks. The situation remains very fluid, requiring ongoing attention,” he warned.
Elsewhere, Norway-based marine insurance and P&I service providers, Gard and Skuld have said that reinsurers’ appetite for war‑risk exposure was tightening, and in practical terms, it will result in their withdrawing capacity at short notice.
As a result, they had decided to cancel War Risk cover.
In Skuld’s case, this takes effect on 5th March, and will cover Iran and Iranian waters, including coastal waters up to 12 nautical miles offshore, plus Persian/Arabian Gulf and adjacent waters, as defined.
