Marine insurers have suffered billions of dollars in losses due to coverage of war risks in the Strait of Hormuz during the ongoing conflicts between the United States and Iran. This comes as premium rates have significantly increased.
Increase in Premium Rates and Decrease in Ship Traffic
According to the International Maritime Organization, premiums for cargo and hull insurance for passage through the Strait of Hormuz have risen dramatically, reaching dozens of times higher than before the war began in late February. During this period, 84 ships have been attacked in this region, and at least 23 crew members have lost their lives. In July, this organization urged governments to reduce insurance costs for passage through the Strait of Hormuz to facilitate maritime cargo flows.
Read more: Vitesse Completes Acquisition of Stake in Denver-Julesburg Oil Field
Insurer Losses and Government Actions
Lars Lange, Secretary General of the International Union of Marine Insurance (IUMI), stated in an interview that it is estimated that insurer losses could reach around two billion dollars. These losses are primarily due to damages resulting from war in the form of business interruption and damage to ships. Additionally, the London-based insurance company Lloyd's has reported that its members have incurred $1.9 billion in losses due to the marine insurance crisis in the first half of 2026.
The number of ships passing through the Strait of Hormuz, which normally transports 20 percent of the world's oil and liquefied natural gas during peacetime, has currently decreased to about 20 ships per day. This number has sharply declined from the pre-conflict level of over 130 ships.
Although marine insurers continue to provide war coverage during the crisis, it is expected that this trend will persist for long-term customers in the energy supply chain. Lange noted that the level of premiums will depend on the principles of supply and demand in the insurance markets.
During this conflict, the United States has initiated a $40 billion reinsurance facility through a government development company to provide the necessary coverage for passage through the Strait of Hormuz. Additionally, Saudi Arabia is establishing a marine insurance pool that combines government resources with private insurers. In the United Arab Emirates, the state-owned company DP World has provided cargo insurance coverage against war-related damages.
Read more: Wood Secures $200 Million Construction Services Contract from ExxonMobil PNG · Brent Oil Price Above $102 Amid Stalled Iran Talks
