Chris Jones, Chief Executive of the International Underwriting Association (IUA), said members are continuing to provide cover for clients affected by the current hostilities involving Iran across several lines of business, adding that the marine war risk market is operating as expected, given the heightened threats to shipping.
According to Jones, even before the current hostilities began, Iran and the wider Middle East were already considered areas of heightened risk, and insurance coverage in place reflected that assessment.
“IUA members are, however, continuing to provide cover for clients affected by the current hostilities in Iran across a number of lines of business,” he added.
Jones noted that the most prominent impact has been on shipping in the Strait of Hormuz, where trade has been halted not due to a lack of available insurance but because of obvious safety concerns.
On the orders of President Donald Trump, the U.S. International Development Finance Corporation (DFC) and the U.S. Treasury have unveiled a plan to deploy Maritime reinsurance, including war risk, in the Gulf region. The DFC reinsurance facility will insure losses of up to $20 billion on a rolling basis.
More recently, the chairman of Lloyd’s, Charles Roxburgh, said the insurance marketplace would work with Britain, the U.S. and international partners on a “comprehensive response to the situation.”
Reports suggest that in a meeting with Finance Minister Rachel Reeves, Roxburgh reaffirmed Lloyd’s confidence in its marine insurance market, which remains open and continues to support international trade and shipping despite the heightened risks.
Lloyd’s head of underwriting, Patrick Davison, reportedly told the Financial Times that the slowdown in vessel traffic is not an insurance issue but reflects concerns over vessel and crew safety.
Davison added, “All the insurers at Lloyd’s are still quoting business, and will still provide cover to basically anyone who asks.”
With this in mind, IUA’s Jones observed that the marine war risk market is operating as expected amid rising threats to shipping, with insurers focused on ensuring clients can continue to access the coverage they need.
Jones continued, “With the situation rapidly evolving, it is important that in-depth, real-time security advice is available.
“The London Market’s joint marine committees are working with expert consultants to provide underwriters with the latest information. We welcome any initiative to improve the security situation.
“Elsewhere, the London company market is also providing aviation cover to support flights transporting people away from the affected areas – both via existing flight routes and new repatriation operations.
“With airspace opening and closing, based on the assessment of aviation authorities, insurers are working with brokers, clients and third-party experts to closely monitor changes in risk.”
