Physical losses may still be relatively contained but the US-Iran conflict is generating a second wave of insurance exposure through delay, deviation, cancellation and aggregation risk that has become the central insurance issue. For insurers and brokers, one big supply chain focus area is what happens when assets like ships, cargo and planes are immobilized and when voyages extend in duration, or, are cancelled altogether.
“The accumulation risk from prolonged disruption across ports and chokepoints is increasing,” said Lewis Hart, head of marine, Asia, at Willis, a WTW business. “Particularly for clients with high asset concentrations especially around the Straits of Hormuz where maritime activity remains at a standstill.”
The shipping sector is where that pressure is most visible. Maersk has suspended reefer and dangerous cargo acceptance in and out of several Gulf markets and halted all new bookings between the Indian subcontinent and upper Gulf markets including the UAE, Bahrain, Qatar, Iraq, Kuwait and parts of Saudi Arabia. The same advisory earlier this month warned that airline cancellations and re-routing, sea-air disruption, customs delays and stricter security could all extend transit times and shift costs.
“While vessel movements through the Strait of Hormuz and the Persian Gulf remain significantly constrained, the length of conflict, rising economic pressure and shifts in the risk balance between underwriters and shippers will be critical in determining the pace of any resumption in traffic,” he said.
Other global brokers are reporting the same challenges. “For many organizations, the most significant exposure isn’t physical damage, but sustained disruption to supply chains, logistics routes and coverage structures,” said Joe Peiser, CEO of Risk Capital for Aon.
The market concern is not just whether vessels can move, but what happens to claims when they cannot. Hart’s broader point is that delay and cancellation losses can multiply even in the absence of major hull losses, especially where cargo is diverted, voyages are prolonged or crew and support staff need to be moved out under pressure.
That is why brokers are drawing attention to policy wordings as the conflict drags on. Nick Francis, marine partner at Kennedys, said shipping stakeholders and cargo operators need to be mindful of gaps in their war risks cover.
“A particular concern for cargo would be a coverage gap for loss or damage caused by delay – as opposed to direct physical damage,” said Francis.
He also warned of the stranded-asset problem now hanging over the Gulf fleet, pointing to the many vessels currently trapped there.
“If the war continues with vessels stuck, then constructive total loss issues will arise as the 12-month deprivation period looms,” he said.
Aon’s Phil Smaje has already quantified the aggregation risk at the outbreak of the conflict. He reported roughly 750 vessels worth about US$25 billion in the Persian Gulf when fighting began on February 28. One immediate insurer concern is how that exposure stacks up geographically.
Aviation is showing the same pattern: not yet a wholesale market break, but growing operational strain. Smaje said underwriters are taking “a cautious but measured stance”, with more attention on ground accumulations at hubs such as Dubai and closer scrutiny of routing, airport selection and aircraft relocation plans. Maersk’s March 2 advisory also pointed to temporary airspace suspensions across several states and warned that airline cancellations and reroutings were already reducing flight options and extending transit times.
Increasing numbers of cruise ship holiday makers, from the Gulf to the Mediterranean, are starting to experience disruptions.
“Additionally, there are areas where we are seeing large contingent losses such as cruise cancellation in the Gulf and Mediterranean,” said Hart.
For example, MSC Cruises said the remaining three voyages of MSC Euribia’s winter season from Dubai had been officially cancelled, with impacted guests offered full refunds while the line worked with airlines, embassies and authorities on onward travel and repatriation. AROYA Cruises has also said it will not proceed with the remaining sailings scheduled in the Arabian Gulf for the current season and confirmed that all guests on board were safely disembarked in Dubai on March 7. Other lines have also cancelled winter cruising holidays in the Arabian Gulf for 2025/26.
That’s hitting Europe-bound operations. According to industry reports, two Iconic Aegean departures scheduled this month on Celestyal Discovery have cancelled because of difficulty getting this ship back from the Gulf.
Cruise disruption is a multi-line claims issue: cancellation and curtailment costs, passenger refunds, repatriation, accommodation, crew logistics, itinerary deviation costs and potential supplier disputes. This is one of the growing concerns for insurers and brokers as the conflict’s impact widens and disruption moves further beyond the war zone.
