🚢 Israel-Iran Conflict to Push Up Marine Premiums as Insurers Invoke War Cover
With tensions between Israel and Iran escalating in 2025, global marine insurance markets are witnessing immediate repercussions. Insurers are invoking war risk clauses, leading to a spike in marine insurance premiums for cargo vessels and freight operators in the Middle East and nearby trade routes.
💰 War Risk Cover Kicks In
The Israel-Iran conflict has now become a significant trigger event for underwriters. Most shipping policies include war risk insurance, which gets activated during state-level military conflicts.
War risk premiums have reportedly increased by 20–30% for vessels traversing through the Persian Gulf, Red Sea, and Eastern Mediterranean.
Routes passing through the Strait of Hormuz are now categorized as high-risk maritime zones, attracting additional charges from reinsurers and shipowners.
🌍 Global Impact on Shipping and Trade
The situation is expected to have global repercussions:
Freight and logistics costs are expected to rise across Europe, Asia, and Africa.
Exporters and importers, particularly in India, China, and Southeast Asia, will face higher insurance premiums on bulk goods, oil, and manufactured shipments.
Delays in cargo delivery are also anticipated due to rerouting and stricter maritime inspections.
📊 Industry Reaction
Insurance companies, including Lloyd's of London syndicates and major reinsurers, have started reclassifying shipping zones. War risk premiums, which are recalculated weekly, have been adjusted upward across several routes linked to Middle Eastern ports.
Logistics experts warn this may cascade into inflated consumer prices, particularly for oil, electronics, and automotive parts.
🛢️ What This Means for India
India, a major importer of crude oil and fertilizers via West Asia, is expected to see:
A surge in import costs
Higher marine insurance premiums passed down to exporters
Delayed shipments from affected ports in the Gulf
Indian marine insurers and exporters are already in talks to renegotiate coverage clauses.
❓FAQs: Impact of Israel-Iran Conflict on Marine Insurance
Q1: What is war risk cover in marine insurance?
War risk cover protects against damage or loss caused by war, conflict, or terrorism—outside of standard insurance policies.
Q2: Which trade routes are most affected by this conflict?
Key maritime zones such as the Persian Gulf, Gulf of Oman, Red Sea, and Suez Canal are considered high-risk.
Q3: Who pays the increased premiums?
Generally, the freight forwarders or exporters pay higher premiums, which may eventually be passed on to consumers.
Q4: How soon will this affect prices of goods in India?
If the conflict continues, logistics costs may rise within 2–4 weeks, especially for oil, electronics, and bulk cargo.
Q5: Can marine insurers deny claims due to war?
Only if war risk isn’t explicitly covered. Hence, policies are now being updated or renegotiated to include it.
✅ Conclusion
As the Israel-Iran conflict escalates, global shipping lanes are being redrawn under a new cost regime. The invocation of war risk clauses by insurers marks a pivotal shift in the marine insurance landscape, signaling higher freight costs, delayed deliveries, and logistical uncertainty—especially for India and other oil-importing nations.
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Reported by Benny on June 21, 2025.
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