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War risk premiums remain elevated despite Hormuz mine-clearing claims
For a $150 million tanker, a 10% war risk premium implies a $15 million insurance cost for one transit, versus roughly $375,000 before the conflict.
President Trump said on Truth Social that mines have been removed or detonated in the Strait of Hormuz, but marine insurers say pricing has not caught up because underwriting conditions tied to demining have not been met, according to Insurance Business and reporting referenced in the article.
Within weeks of US and Israeli strikes that began Feb. 28, war risk premiums reportedly jumped from around 0.25% of hull value to between 3% and 10%. Marsh's global head of marine, Marcus Baker, is cited as saying rates surged after the strikes, leaving many commercial vessels effectively priced out of the route even when political announcements suggest improvements.
The Lloyd's Market Association's Joint War Committee expanded its high-risk designation to cover the entire Persian Gulf when hostilities began, and the article says that listing will not be removed until the committee sees sustained, incident-free passage and formal evidence that demining is complete. The piece adds that those conditions had not been satisfied as of publication, pointing to ongoing indicators such as a tanker being disabled by a strike shortly before Trump’s post.
The article also notes that the war has generated $2 billion to $3 billion in market-wide claims across the war, terror and political violence segment, exceeding the segment’s estimated annual global premium volume of $1.5 billion to $2 billion, citing Howden. It concludes with the view attributed to Lloyd's Market Association that capacity exists, but coverage is available only at a price that reflects risk.