War risk insurance premiums for vessels transiting the Strait of Hormuz have risen sharply this week as escalating security concerns, including attacks targeting commercial ships and renewed uncertainty following the collapse of a temporary ceasefire between the United States and Iran, have led marine insurers to reassess their exposure in the region.
The increase has pushed additional insurance premiums for vessels navigating the strategic waterway to between 1% and 5% of vessel values, according to senior sources in the marine insurance market. The latest rise highlights growing concerns among underwriters over the potential risks facing commercial shipping operations through one of the world’s most important maritime chokepoints.
These figures were reflected in a survey of seven leading marine insurance market sources, which found that additional war risk premiums for Strait of Hormuz transits are currently being quoted within the same range. The sources said the upward movement in rates comes as insurers factor in heightened security threats and the possibility of further disruptions to vessel movements.
Within this broader market shift, some insurers have indicated that premiums could rise further. One senior insurance source said rates for vessels passing through the Strait are expected to reach at least 5%, while two other market participants confirmed that premiums have already increased to this level. Another source said rates could move to between 4% and 5%, with insurers providing a 50% no-claims discount if attacks continue.
The current premium levels represent a significant increase compared with the previous market benchmark of approximately 2%, which had been agreed before the latest security developments, according to one source familiar with the sector.
Meanwhile, another market source noted that premiums had ranged between 2.5% and 3% during the previous week, indicating that the latest increases have occurred as regional security concerns continued to intensify.
The continued rise in war risk premiums comes amid uncertainty over the future security environment in the Gulf region following the breakdown of the temporary ceasefire between the United States and Iran. Marine insurers and shipping operators are closely monitoring developments as they assess the potential impact on vessel routing, operating costs, and maritime trade flows through the Strait of Hormuz.
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