The global marine insurance market is continuing to provide cargo, hull, liability and offshore energy cover despite escalating geopolitical tensions in and around the Middle East, with insurers generally adjusting terms and pricing rather than withdrawing capacity, according to a statement from the International Union of Marine Insurance (IUMI).
Industry analysts have warned that the current phase could still become a “very sizable event” for the marine segment if conflict or sanctions trigger large‑scale losses, given how concentrated the class is compared with broader non‑life business.
For now, the emphasis is on recalibration and risk selection rather than retrenchment.
Moody’s Ratings recently highlighted marine exposure as a key channel through which the Middle East conflict could affect insurers. The Persian Gulf and Strait of Hormuz remain “a key shipping route to export oil and gas”, and vessels in the region “are typically insured by insurance companies or reinsured by reinsurance companies”, leaving the sector clearly exposed.
Around 1,000 vessels are currently trapped in the Gulf, with the value of those ships estimated at “around or above 25 billion US dollars”, and some market estimates putting potential insured exposure as high as $40 billion. Moody’s noted that while the global insurance industry should be able to absorb such losses overall, the same scenario would be far more material for specialist marine carriers.
Conflict in the Red Sea and Black Sea has also pushed more traffic onto longer routes around the Cape of Good Hope, increasing voyage times, fuel costs and cumulative risk per policy period. Market commentary has pointed to war risk premiums on some routes rising from around 0.4% of a vessel’s value to as much as 1% as underwriters reprice exposures in breach zones.
Despite this, Moody’s said European insurers and reinsurers generally enter this period from a position of balance sheet strength, with solvency ratios “above 200% for everyone” and increasing between 2024 and 2025, and net income growing across both primary and reinsurance sectors.
Cargo insurers remain committed to supporting trade flows, including in higher‑risk areas such as the Persian Gulf and Red Sea, stated the IUMI. The evolving situation has prompted changes in war risk pricing, deductibles and policy structures, but capacity is still available for well‑presented risks.
Many carriers continue to work through short‑notice cancellation and reassessment clauses, allowing them to adjust terms quickly if threat levels shift rather than exit whole regions.
The friction is increasingly around routing, sanctions screening and documentation of onboard and shoreside risk controls, with underwriters demanding more detailed voyage and cargo information in exposed corridors, Moody's said.
The global hull market also remains outwardly stable, the IUMI said, underpinned by shipping demand and elevated freight earnings on some long‑haul trades. Even as trading patterns shift, hull insurers are still offering cover while tightening terms to reflect altered risk profiles. Moody's said the Middle East situation has created more rerouting and congestion but has not triggered a broad withdrawal of hull capacity.
Instead, underwriting is becoming more selective, with greater focus on aggregation around chokepoints, voyage‑specific exposures in conflict‑adjacent waters and older “shadow fleet” tonnage involved in opaque or sanctions‑adjacent trades.
Market analysis points to a widening gap between well‑documented fleets and higher‑risk operations, wherein the former continue to attract abundant capacity and competitive pricing, while the latter face steeper premiums, tighter warranties and, in some cases, declinature. Inflation in steel, labour and yard costs is also lifting repair and total loss settlements, pushing claim severity higher even outside war‑related incidents.
In offshore energy, capacity remains widely available, according to the IUMI, particularly for upstream exploration and production, despite increased geopolitical volatility. Tensions in the Middle East and concerns over energy infrastructure have sharpened underwriting scrutiny and driven changes in pricing, attachment points and wordings around war, terrorism and political violence, but have not produced a systemic withdrawal.
For many Gulf insurers, war risks are typically excluded from standard policies, meaning the more immediate impact of the conflict is likely to appear via investment portfolios - a hypothetical 20% fall in regional real estate and equity valuations would reduce total equity by around 7%, a level analysts consider broadly absorbable given current capital buffers.
On the liability side, underwriters have shifted non‑poolable and charterers’ exposures onto a case‑by‑case footing, allowing more granular rating of particular trades and routes, the IUMI stated.
By contrast, Moody's said cover under the main International Group of P&I Clubs remains unchanged and non‑cancellable, continuing to underpin shipowners’ liability programmes. War and sanctions‑related issues are being handled largely through additional clauses, special covers and reinsurance rather than adjustments to the core pool structures.
That places more weight on programme design and alignment between hull, war, P&I and ancillary liabilities, particularly around sanctions and political‑risk triggers.
At product level, some markets are experimenting with combined facilities that bundle cargo with war, terrorism and political risk into a single package, alongside wider use of geographic breach zones where additional war terms and pricing apply once a vessel enters a defined area.
According to Moody's, these tools offer more dynamic control of accumulation and pricing; for assureds, they demand more active voyage planning and closer real‑time communication with brokers and underwriters.
Overall, marine insurers are still providing capacity across cargo, hull, liability and offshore energy while recalibrating how that capacity is deployed.
Strong capital positions support that resilience, but in a market that remains “much more concentrated” than wider non‑life, any major marine loss or prolonged disruption around key chokepoints would quickly test how far that resilience extends.
