According to Dylan Mortimer, Marine Hull UK War Leader, Marsh, there could be near-term rate increases for the Marine Hull line of business in the Gulf of 25-50%, while other reports reveal that some underwriters have reacted swiftly and cancelled certain annual hull war policies under standard 7-day war clauses.
On February 28th, 2026, the US and Israel hit Iranian military targets, to which Iran responded by launching missiles and drones at US bases and regional allies.
The geopolitical shock in the region increases underwriting and investment challenges for numerous lines of insurance business, notably marine, aviation, property, travel, and supply-change.
“It is very early to tell at this point, but we would estimate that near-term rate increases for Marine Hull insurance in the Gulf could range from 25 to 50 percent, barring any direct attack on Merchant shipping, which could have major repercussions across war insurance rates. Given the military build-up in the region, crew are far more likely to be concerned than they might have been to previous risks. The situation remains very fluid, requiring ongoing attention,” said Mortimer.
According to the Financial Times, insurance companies have told ship owners that they would cancel policies and lift prices for vessels passing through the Gulf and Strait of Hormuz, a vital sea passage from the Persian Gulf to the open ocean.
Insurance brokers also told the Financial Times that war risk insurers have already submitted cancellation notices for insurance policies covering ships moving through the Strait of Hormuz.
News reports suggest that over 200 vessels dropped anchor in the area. Last year, the Strait saw over 14 million barrels passing per day. “The primary risks centre on the Persian and Arabian Gulf, particularly the threat of vessel boarding and seizure by Iranian forces and the potential closure of the Strait of Hormuz,” explained Mortimer.
It’s been revealed that shipping company Maersk paused sailings through Bab el-Mandeb and the Strait of Hormuz, while marine insurer Skuld has cancelled war risk cover. Skuld emphasises the evident tightening of reinsurers’ appetite for war‑risk exposure, which the Association says will result in reinsurers withdrawing capacity at short notice.
At the same time, Indian public sector reinsurer, General Insurance Corporation of India (GIC Re), will withdraw marine hull war risk cover in several high-risk global regions, according to CNBC TV 18, citing an official notice issued by the company.
According to Stephen Rudman, Head of Marine, Asia, Aon, underwriters are withdrawing or revising existing quoted additional premiums (APs) for transits through listed high-risk areas, with the reinstatement of cover being offered at materially increased rates.
Additionally, he explained that there is a heightened underwriting scrutiny for voyages into or near sensitive zones, including a potential requirement for prior approval.
Rudman says that it is important to note that these moves relate specifically to war risk extensions. Core hull and machinery and P&I covers remain in place unless otherwise advised.
Looking at the hull war market, Rudman believes that it has reacted more immediately due to aggregation exposure and capital sensitivity. He said, “Additional premiums for vessels transiting high-risk waters are rising sharply and may continue to fluctuate in the short term. Cargo war risk remains available; however, rates are increasing, and quotations are being reviewed on a voyage-by-voyage basis, particularly for energy and bulk commodity trades.”
Rudman explained that, right now, broker Aon is not seeing a systemic withdrawal of capacity. Rather, the market is repricing to reflect the elevated risk profile and reinsurance constraints. Should the situation escalate materially (e.g., sustained state conflict or significant vessel loss), further rate correction is likely, he warned.
Aon recommend that clients review war cancellation provisions within existing policies, engage with brokers early, before fixing voyages in high-risk areas, assess charterparty war clauses and allocation of additional premiums, and factor potential AP volatility into freight and commercial planning.
Rudman said, “Our marine team continues to monitor developments closely and is in active dialogue with London and international markets.”
