MARINE insurers continue to “show resilience” and maintaining the availability of cargo, hull, liability and offshore energy cover, the International Union of Marine Insurance (IUMI) says.
This is despite the increasingly ferocious conflict occurring in the West Asia/Middle East region.
According to IUMI, cargo insurers across global markets remain committed to supporting trade flows, including in the Persian Gulf and Red Sea.
“Although the evolving situation in the Middle East has prompted adjustments — particularly in war risk pricing and policy structures — significant capacity is still available,” it stated.
“Many insurers are continuing to provide cover through established mechanisms, including cancellation and reassessment provisions, allowing for flexibility as conditions change.”
Operational challenges are said to remain significant.
“Shipping disruptions, including sharply reduced vessel traffic and rerouting, have increased complexity for clients,” IUMI stated.
However, insurers are responding with tailored solutions and case-by-case underwriting to ensure continued protection for cargo interests.
The global hull insurance market is said to have remained “outwardly stable”, backed by resilient shipping demand and strong freight earnings.
“Even as geopolitical tensions reshape trading patterns, particularly around key transit routes, insurers continue to provide cover, adapting terms and pricing where necessary to reflect evolving risks,” IUMI stated.
In the offshore energy sector, insurance capacity is said to remains “widely available”.
“Recent escalation in the Middle East, including impacts on energy infrastructure and supply flows, has introduced additional uncertainty into global markets,” IUMI stated.
“Nevertheless, insurers continue to provide cover supporting energy production and transportation activities worldwide.”
IUMI stated that liability underwriters had taken the decision to adjust the way their non-poolable and charterers exposures were placed.
“Most of those contracts were moved to that basis but there was no change to provision of cover under the main International Group of P&I Clubs (IG) programs as those are non-cancellable,” IUMI stated.
Head of underwriting, marine, for SALT Marine Risks Australia, Iain Sharples, said insurers in Australia and New Zealand had been issuing notice of cancellation regarding war risks (and sometimes strikes cover) on marine insurance policies with focus on the two defined areas in the Middle East (Persian Gulf and the Red Sea).
“This has been mainly for marine cargo policies as most blue water vessels that operate here are owned and insured outside of Australia or do not need to enter the defined areas,” Mr Sharples said.
“The marine cargo insurance market activity has been limited, to date, due to the low volume of shipments moving through those areas since the conflict began.
“When cover is being requested by insureds and their brokers, some insurers are willing to offer coverage at suitable terms for existing insureds while others are declining at this stage.”
Mr Sharples said marine liability coverages were not typically involved in exposures to the region, but where they were the insured was usually entitled to exclude or limit liability for war.
“We would encourage those that are involved with shipments in and around the affected regions to engage with their insurance broker and their insurer at the earliest opportunity,” he said.
“This will enable consideration of existing coverage and what the options are in terms of reinstatement of war risks where the cancellation has been applied.”