Marine insurance companies cancel war risk coverage due to Iran conflict
Several marine insurance companies announced the cancellation of war risk coverage for ships against the backdrop of the escalation of the conflict in Iran, in a move that would increase pressure on global shipping and energy movement.
Companies including (Gard, Skuld, NorthStandard, London P&I Club, and American Club) reported that the cancellation decisions will take effect as of March 5, according to notices dated March 1 on their websites.
According to the notices, war risk coverage will be excluded. In Iranian waters, in addition to the waters of the Gulf and neighboring areas. Skuld explained that it is working on a “repurchase” option to reactivate insurance coverage.
In the same context, the Japanese MS&AD Insurance Group told Reuters that it has stopped subscription to a number of insurance policies that cover war risks in the waters surrounding Iran, Israel and neighboring countries.
These developments came in light of a sharp escalation of tensions in the Middle East after the US and Israeli strikes on Iran over the weekend, which prompted Tehran to announce the closure of navigation through the Strait of Hormuz, one of The most vital corridors for global oil and gas flows.
Subsequently, a number of oil tanker owners, major energy companies, and commodity trading houses suspended shipments of crude oil, fuel, and liquefied natural gas through the narrow passage, while satellite tracking data showed the accumulation of ships near major ports in the Emirates, including the port of Fujairah.
Ship tracking data showed, on Sunday, a widening scope of disturbances, with at least 150 tankers – including crude oil and gas tankers – anchored. Liquefied natural – in the open waters of the Gulf outside the Strait of Hormuz, along with dozens of ships parked on the other side of the passage.
The risks worsened after at least three tankers were damaged off the coast of the Gulf, and the death of a sailor, in an indication of the escalating security risks threatening maritime trade movement.
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