Marine insurers have begun withdrawing or sharply restricting war risk cover for vessels transiting sensitive West Asian waters, even as hull and cargo premiums surge in response to escalating hostilities in the region.
Shipping industry sources said underwriters are either declining fresh war risk policies or quoting significantly higher additional premiums for voyages through high-risk zones, particularly near the Strait of Hormuz and parts of the Red Sea. These routes are vital arteries for global oil, gas and container traffic.
War risk insurance typically covers damage or loss caused by acts of war, terrorism or civil unrest — protection that standard marine policies exclude. With the security environment deteriorating, insurers are reassessing exposure and, in some cases, issuing short-term notices to revoke automatic cover for transits through designated conflict areas.
Shipowners report that additional war risk premiums (AWRPs) have multiplied several-fold in recent days, substantially increasing voyage costs. For large crude carriers and container vessels, the extra insurance outlay can run into hundreds of thousands of dollars per voyage, depending on the vessel’s value and cargo.
The tightening insurance market is adding to operational strain already caused by rerouting , longer sailing times and elevated fuel consumption. Freight rates across several segments have firmed up as carriers pass on higher risk and compliance costs to charterers.
Indian shipping companies and exporters are closely monitoring developments, given the country’s heavy reliance on maritime trade and energy imports from the region. Industry bodies have urged coordinated international action to ensure safe navigation and restore underwriting confidence.
As geopolitical uncertainty persists, maritime stakeholders warn that prolonged withdrawal of comprehensive war risk cover could disrupt trade flows and intensify cost pressures across global supply chains.
