David Kinzel, Political Risk U.S. Practice Leader at Aon, suggested that although the U.S. and Iran have reached an agreement to halt their military conflict, uncertainty surrounding the deal’s terms is likely to prevent any material improvement in risk appetite for the sector in the near term.
On June 15, U.S. President Donald Trump, Vice President JD Vance and Iranian Parliament Speaker Mohammad Bagher Ghalibaf digitally signed a temporary Memorandum of Understanding aimed at ending active hostilities between the two countries.
The preliminary agreement establishes a 60-day negotiating period during which the parties will seek to conclude a comprehensive peace treaty.
A formal signing ceremony for the framework agreement is scheduled to take place on June 19 in Bürgenstock, Switzerland, near Geneva.
With this in mind, Aon risk advisory leaders are reportedly monitoring how insurers are responding across political risk, marine/cargo and the broader commercial risk market.
According to David Kinzel, political risk and political violence insurers have been “extremely careful” in the Middle East region throughout the conflict, in many cases declining to support new business or tightening terms and exclusions on renewals.
Kinzel continued, “With uncertainty about the terms of the agreement, what it means for the reopening and security of the Strait of Hormuz, and whether the de‑escalation will hold, we expect underwriters to remain cautious.
“Over the next few weeks, we do not expect a material change in risk appetite. Insurers will want to see a sustained period of calm, clearer implementation of the deal, and some evidence that trade and energy flows can normalise before they are willing to take on more exposure in the region.
“That kind of shift would likely be measured in months rather than weeks, and recent volatility will remain very present in underwriters’ minds as they assess new risks over the next 12–18 months.”
Phil Smaje, Global Industry Specialty Leader, Transportation and Logistics for Aon, added, “We would expect a degree of caution from marine war insurers in the near term until there is greater clarity that the conflict has subsided.
“From there, pressure is likely to build to reduce or remove additional war premiums. At the same time, markets will be assessing losses stemming from the Middle East conflict.
“While the scale of those losses will influence pricing, the availability of insurance capacity in the aftermath of the conflict will be a key determinant of overall pricing levels and market appetite.”
