Chris Jones, chief executive of the International Underwriting Association (IUA), said members will continue to insure clients across multiple business sectors affected by current hostilities involving Iran, adding that the maritime war risk market is functioning as expected given the heightened threat to shipping.
Even before the current hostilities began, Jones said Iran and the Middle East as a whole were considered higher-risk areas, and existing insurance coverage reflected that assessment.
“However, IUA members will continue to provide assurance to clients across multiple business areas affected by current hostilities in Iran,” he added.
Jones noted that the most significant impact was on shipping in the Strait of Hormuz, where trade was halted not because of a lack of available insurance but because of clear security concerns.
Following orders from President Donald Trump, the U.S. International Development Finance Corporation (DFC) and the U.S. Treasury Department unveiled a plan to deploy maritime reinsurance, including war risk, in the Gulf. The DFC reinsurance facility will insure up to $20 billion in rolling losses.
Recently, Lloyd’s chairman Charles Roxburgh said the insurance market would work with UK, US and international partners to “respond comprehensively to the current situation”.
In a meeting with Finance Minister Rachel Reeves, Roxburgh reportedly reiterated Lloyd’s confidence in its marine insurance market, which remains open and continues to support international trade and shipping despite heightened risks.
Patrick Davison, head of underwriting at Lloyds, reportedly told the Financial Times that the slowdown in ship traffic was not an insurance issue but reflected concerns about the safety of ships and crews.
Davidson added, “All Lloyd’s insurers are still quoting and will still provide coverage to basically anyone who asks.”
With this in mind, the IUA’s Jones observed that amid rising threats to shipping, the naval war risk market is functioning as expected, with insurers focused on ensuring customers can continue to get the coverage they need.
Jones continued: “With the situation rapidly evolving, it is important to provide in-depth, real-time security advice.
“The London Market’s Joint Maritime Committee is working with expert advisers to provide underwriters with the latest information. We welcome any initiatives to improve the safety position.
“Elsewhere, the London corporate market is also providing air cover to support flights transporting people out of affected areas via existing routes and new repatriation operations.
“Insurers are working with brokers, clients and third-party experts to closely monitor changes in risk as airspace opens and closes, based on assessments by aviation authorities.”
Amid Middle East hostilities, post-naval war risk markets ‘perform as expected’: IUA appeared first on ReinsuranceNew.ws.
