War risk cover is holding firm despite escalating tensions in the Middle East, with insurers continuing to quote and write business even as risks intensify around key shipping routes.
Recent developments in and around the Strait of Hormuz have raised concerns over vessel and crew safety, but the market has not withdrawn capacity.
Calvin Gray, head of global marine at Intact, said the idea that insurers are stepping back does not reflect current market conditions. “There's a perception that insurers are stepping back, but that’s not what we’re seeing in reality,” he said. “Capacity is still there and cover is still being provided.”
He added that insurers are “continuing to quote and write business where it’s operationally viable,” with the market “doing what it’s built to do, which is keep trade moving even when conditions become more difficult.”
Restrictions in high-risk areas are instead being driven by conditions on the ground. Gray said “at the heart of this is the safety of crews and vessels.” When risk levels rise to a point where people or ships could be put in real danger, “that naturally affects how cover is applied,” he said, adding that it is not about insurers pulling away but “a reflection of what’s actually happening.”
Pricing is also moving quickly as the risk environment shifts. Gray said “This is a market that moves quickly by design,” with mechanisms such as seven-day cancellation provisions allowing insurers to adjust pricing and exposure almost in real time as events develop. That responsiveness can be misread as instability, he said, but “it’s what allows the market to keep operating.” Rates go up when risk increases, but they can come down just as quickly if conditions ease.
While the market continues to function, the stakes remain high if disruption persists. Gray said shipping markets have historically shown resilience. “We’ve seen before, including with the Black Sea grain corridor in 2022, that shipping markets are remarkably adaptable and trade tends to find a way,” he said.
However, with around 20% of global oil flowing through the Persian Gulf and 80–85% of goods transported by sea, he warned that any sustained disruption would be felt far beyond the region, feeding through into supply chains and the wider global economy.
The market is still operating, but risk, pricing and access to cover increasingly shaped by conditions on the ground.
