Stephen Rudman, head of Asia maritime at global insurance and reinsurance brokerage group Aon, said a two-week ceasefire in the Middle East conflict was not enough to materially change risk pricing or underwriting stances.
On April 8, the United States, Iran and Israel, brokered by Pakistan, agreed to a two-week ceasefire to halt attacks between the parties as part of efforts to pause the escalating regional conflict and start talks on a long-term deal.
The deal includes provisions for safe passage through the Strait of Hormuz, but shipping remains severely restricted and tensions remain high.
With this in mind, Aon’s Ruderman commented on the insurance implications of the two-week ceasefire in the Middle East.
“From an insurance perspective, a two-week ceasefire is not enough to materially change risk pricing or underwriting positions,” he said. “Additional war risk premiums are driven by forward-looking threat assessments rather than short-term political developments. While this announcement may help stabilize market sentiment and reduce some near-term volatility, underwriters may view it as a temporary pause rather than a resolution of geopolitical risks.”
Ruderman stressed that while the ceasefire, which is extremely fragile according to mainstream media reports, may help stabilize and reduce some near-term volatility, underwriters are expected to view it as a temporary ceasefire rather than a solution to risks.
“As a result, we expect scrutiny of Gulf transit to continue and war risk pricing to generally remain elevated until there is clearer evidence of sustained de-escalation,” Ruderman said.
Ruderman further explained that any meaningful adjustments in insurer interest or pricing typically lag behind geopolitical announcements.
“Prior to reviewing risks in the Gulf, insurers will seek consistency and persistence in the safety environment, including navigational movements, incident frequency and diplomatic follow-up.
“In reality, it may take several weeks or longer for stabilization to occur before underwriters reassess underlying assumptions. Even then, changes are more likely to be incremental rather than a rapid return to pre-crisis pricing or terms,” ​​he said.
In terms of risks that could prevent shipping activity from returning to normal, Ruderman stressed that the main risk remains the fragility of the ceasefire itself.
“Any escalation involving proxies, isolated incidents at key chokepoints, or new sanctions or military activity can quickly reverse any improvement in sentiment.
“In addition, operational risks – such as crew welfare, port disruption and the availability of war risk capabilities – continue to influence shipping decisions and insurance responses.
“Until these risks are significantly reduced, a full return to ‘normal’ trading conditions in the region remains unlikely.”
