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War Risk Premiums Soar for Gulf Voyages
1 Mar
Summary
- Insurers are canceling policies and increasing premiums for ships in the Gulf.
- Coverage costs for a $100 million vessel could rise to $375,000 per voyage.
- Ships may face radio warnings and potential seizure attempts in the Strait of Hormuz.
Following retaliatory strikes by Iran on US bases, war risk insurers have initiated cancellation notices for ships operating in the vital Strait of Hormuz. Brokers indicated that policy cancellations and substantial premium increases are now in effect for vessels transiting the Persian Gulf. The cost of insuring a $100 million vessel could escalate from approximately $250,000 to $375,000 per journey.
Underwriters are assessing the risk of further retaliation, which could impact ships calling at Israeli ports, with insurance rates potentially climbing by up to 50%. Experts suggest that continued strikes against Iran may prompt Tehran to leverage its control over regional shipping. There is also an increased concern that Iranian-linked groups might attempt to board or seize vessels. Advisory firms have reported that some ships received radio warnings attributed to Iran's Revolutionary Guard Corps, indicating the strait was closed to shipping.
