Coordinated strikes across multiple Gulf countries are raising a critical question for reinsurers: whether losses will aggregate into a single occurrence or trigger multiple treaty limits across political violence and energy portfolios.
Howden Re’s March 2026 analysis indicates that attacks across energy infrastructure in several jurisdictions could be treated as one event, accelerating exhaustion of treaty limits. Political violence risks are often written by local carriers and ceded into London markets, concentrating exposure across shared reinsurance panels and increasing correlation across cedants.
"Political violence capacity is still available, but underwriting discipline has tightened considerably. Insurers are focusing closely on aggregation, war terrorism boundaries and the interaction between local policies and global reinsurance treaties. The key question is no longer whether capacity exists, but how it is deployed and structured," said Richard Miller, managing director, Howden Re.
Energy risks are developing across downstream facilities, offshore production and LNG operations, with infrastructure strikes and shutdowns reported across Qatar, Bahrain, Saudi Arabia and other Gulf states. Qatar LNG capacity is about 37% offline.
Business interruption is identified as a central exposure, with illustrative estimates showing daily losses reaching up to $200m per facility depending on outage duration and production capacity. War risk extensions for Gulf energy infrastructure are being withdrawn or repriced, while some offshore assets are no longer insurable on standard terms.
"While much of the headline attention has focused on shipping and the associated losses seen to date, the impact on the energy industry is far more complex. Infrastructure strikes, precautionary shutdowns and prolonged outages create significant business interruption exposure, much of which may sit outside traditional war risk coverage. This is a highly correlated risk environment that was previously considered tail risk," said Andrew Foot, managing director, Howden Re.
Marine war risk markets have shifted to voyage-by-voyage placements following widespread cancellations triggered by 72-hour notice provisions. Annual war risk cover is no longer written for Gulf exposures.
Premiums have increased from about 0.10–0.125% of vessel value pre-conflict to 2–3% for transit through high-risk areas, with some cases reaching about 5%. For a $100m vessel, premiums have risen from about $250,000 to between $375,000 and $3m per voyage.
Marine war risk pricing has increased by up to 12x, with tanker values averaging $200m–$300m and premiums reaching about $7.5m at a 3% rate. Vessel traffic has declined, with only 16 AIS-visible crossings recorded over a seven-day period ending March 22.
At least 9–15 tankers have sustained damage, with losses estimated at up to $1.75bn before cargo is included.
Developments in South Korea illustrate how primary insurers and cedants are responding to similar pressures. Korean insurers are monitoring worsening loss ratios tied to marine hull and cargo exposures, with 26 vessels stranded in the Persian Gulf in early March and potential payouts estimated at about ₩1.69tn ($1.12bn). War-risk premiums for ships transiting the Strait have risen to around 5% of vessel value from 0.125–0.2% before the conflict, a jump of up to 40-fold. Insurers have cancelled existing marine policies and reoffered coverage at higher war-risk rates, while reinsurers have adjusted capacity and pricing, increasing costs for cedants. Korean insurers cede a significant share of marine risks to domestic and international reinsurers, and higher reinsurance costs are feeding into premium adjustments. With more than 70% of Korea’s crude imports sourced from the Middle East, higher oil prices are also adding pressure to underwriting and investment results.
Demand for political violence and terrorism coverage has increased, particularly among Western-operated assets in the Gulf. The report records more than 500 new policy requests, with pricing increasing by 4–6x or more. Coverage that previously cost under 1% of insured value has risen to multiple times that level, with some quotes reaching up to 10% rate-on-line.
Underwriters are applying stricter controls on aggregation exposure, treaty structure and event definitions, particularly where risks intersect with energy and transport sectors.
The Strait of Hormuz, which carries about 20% of global oil supply, has seen disruption feed into commodity markets. Brent crude rose from $71 pre-conflict to a peak of $119 and remains around $104, an increase of about 46%.
Global GDP is projected to decline by 2.9 percentage points in Q2 2026, with Asia receiving 84% of shipments through the Strait.
"The most immediate impacts are currently evident in political violence/war, marine and energy risks, but the bigger issue for the industry may ultimately come through what we describe as the macro transmission channel. A sustained disruption in the energy supply would raise the risk of renewed inflationary pressure, higher interest rates and the potential for broader sector capital impairment. That combination could affect insurance capacity more materially than insured losses from individual vessels or infrastructure claims," said David Flandro, head of industry analysis and strategic advisory at Howden Re.
Trade credit and political risk lines are also exposed to prolonged disruption, with potential effects on payment performance, letters of credit and contractual obligations tied to global trade.
"Maintaining safe and open transit through the Strait of Hormuz is critical to global trade flows and the stability of the broader credit system. A sustained disruption would be expected to manifest initially as credit and liquidity stress, affecting payment performance, letters of credit, and contractual obligations. For insurers and reinsurers, the key variables are duration and security: how long disruption persists and how effectively routes are protected. These factors will ultimately determine whether credit stress remains contained or translates, over time, into claims across trade credit, sovereign credit, and political risk portfolios," said Sean Riordan, managing director, credit & financial risk, Howden Re.
Despite these pressures, the reinsurance market remains capitalized, with responses centered on repricing, tighter terms and reduced line sizes rather than a broad withdrawal of capacity.
