According to Dylan Mortimer, head of Marine Warfare at Marsh UK, near-term rates for the Marine Corps Hull business line in the Gulf are likely to rise by 25-50%, while other reports indicate that some underwriters have reacted quickly by canceling certain annual Hull War policies under standard seven-day war clauses.
On February 28, 2026, the United States and Israel attacked Iranian military targets, and Iran responded by launching missiles and drones at U.S. bases and regional allies.
Geopolitical shocks in the region have increased underwriting and investment challenges in many insurance business areas, particularly maritime, aviation, property, travel and supply changes.
“It is too early to tell, but we estimate that near-term rate increases for hull insurance in the Gulf are likely to be between 25% and 50%, barring any direct attacks on merchant ships, which could have a significant impact on war insurance rates. Given the military buildup in the region, crews are more likely to be concerned about the risks than before. The situation remains very fluid and requires continued attention,” Mortimer said.
Insurers have told shipowners they will cancel policies and raise prices for ships passing through the Gulf and the Strait of Hormuz, a key sea lane from the Persian Gulf to the high seas, the Financial Times reported.
Insurance brokers also told the Financial Times that war insurance companies had submitted cancellation notices on policies for ships transiting the Strait of Hormuz.
News reports said more than 200 ships were anchored in the area. Last year, more than 14 million barrels of oil passed through the strait per day. “The main risks are centered in the Persian and Arabian Gulf, particularly the threat of Iranian forces boarding and seizing ships and the potential closure of the Strait of Hormuz,” Mortimer explained.
It was revealed that Maersk Line suspended sailings through the Bab el-Mandab and Strait of Hormuz, while marine insurance company Skuld canceled war risk insurance. Skuld highlighted the apparent tightening of reinsurer appetite for war risk exposures, which the association said would result in reinsurers withdrawing coverage capacity at short notice.
At the same time, according to CNBC TV 18, an official notice issued by General Insurance Corporation of India (GIC Re), an Indian public sector reinsurance company, stated that the company will withdraw ship hull war risk insurance in multiple high-risk areas around the world.
Stephen Rudman, head of maritime at Aon Asia, said underwriters were withdrawing or amending existing additional premium offers (AP) for listed high-risk areas and reinstating coverage at significantly higher rates.
In addition, he explained that voyages into or near sensitive areas are subject to rigorous underwriting review, including the possible need for prior approval.
Ruderman said it was important to note that these measures were specifically related to the deferral of war risk. Unless otherwise notified, core hull and machinery and P&I covers remain in place.
Looking at the hull war market, Ruderman believes that it reacts more quickly due to aggregate risk and capital sensitivity. “Additional premiums for ships transiting high-risk waters are rising sharply and are likely to remain volatile in the short term. Cargo war risks remain, but rates are rising and offers are being reviewed on a voyage-by-voyage basis, particularly for energy and commodities trades,” he said.
Ruderman explained that currently broker Aon is not seeing a systematic withdrawal of capacity. Instead, markets are repricing to reflect rising risk profiles and reinsurance constraints. He warned that rates could be adjusted further if the situation escalates significantly, such as ongoing country-to-country conflicts or significant ship losses.
Aon advises clients to review war cancellation clauses in existing policies, engage with brokers early before confirming voyages in high-risk areas, assess charterparty war clauses and allocation of additional premiums, and factor potential AP fluctuations into freight and commercial planning.
“Our maritime team will continue to monitor developments closely and be in active dialogue with London and international markets,” Ruderman said.
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