Middle East Conflict Disrupts Maritime Insurance and Global Supply Chains

Signal

The escalating U.S.-Iran conflict has created a perfect storm in the insurance sector, particularly affecting maritime and aviation coverage. The disruption of shipping through the Strait of Hormuz, combined with attacks on vessels and air cargo restrictions, has reduced global cargo capacity by over 20%. London marine insurers are maintaining coverage but with significantly increased war risk premiums, while major brokers Marsh and Aon are negotiating with the U.S. government to establish new insurance frameworks for tanker protection. The ripple effects extend beyond direct maritime risks to business interruption, cyber threats, and travel insurance exclusions. This confluence of events marks a critical inflection point for insurers, forcing rapid adaptation of risk models and coverage terms while potentially creating new opportunities for specialized war risk coverage products.

Stories

London Marine Insurers Continue Middle East Coverage Despite Rising War Risk Rates

Marine insurers in London market maintain coverage for Middle East shipping despite escalating conflict, with war risk premiums increasing significantly. Over 20% of global air cargo capacity affected by the conflict.

Impact · Insurance capacity remains available but at higher costs, affecting shipping companies' operational expenses and potentially leading to increased transportation costs across supply chains.

Action · Review and potentially renegotiate marine insurance policies to account for increased war risk premiums; consider alternative routing options to minimize exposure to high-risk areas.

London Marine Insurers Continue Middle East Coverage Despite Rising War Risk Rates

Marsh and Aon in Government Talks for Strategic Hormuz Tanker Insurance Solution

Banks Face Elevated Cyber Threat as Iran Conflict Escalates

Six layers on this brief.