The Persian Gulf becomes a “terra incognita”: insurance clubs pull the plug on war risk coverage.
The world's largest marine insurers and insurance clubs are ending war risk coverage for vessels transiting the Persian Gulf and the Strait of Hormuz, following the escalation of the conflict in Iran.
From midnight on March 5 , London time, most major insurance companies will end war risk cover , according to various insurance club circulars.
The American Steamship Owners Mutual Protection and Indemnity Association issued a notice of cancellation on Sunday regarding exposure to war risks in the Persian/Arabian Gulf and Gulf of Oman. These areas are defined as follows: the Persian/Arabian Gulf and adjacent waters, including the Gulf of Oman and waters west of a line from the Omani territorial limit off Cape Al-'Add at 22°42.5'N, 59°54.5'E northeast to the Iran-Pakistan border at 25°10.5'N, 61°37.5'E.
Here is a picture of the affected area:
Area where international war insurance policies will no longer be valid
The advisory will take effect 72 hours after 00:00 GMT on March 2, 2026, the association said.
Separately, the London P&I Club issued a similar notice with the same parameters for the termination of war risk cover, stressing that all other terms and conditions remain unchanged.
Assuranceforeningen Skuld also ceased war risk coverage in view of “a significantly higher level of geopolitical and operational uncertainty”.
“It is already clear that reinsurers' appetite for war risk exposure is declining, and in practical terms, this will result in reinsurers withdrawing capacity at short notice,” Skuld said.
Before the escalation in Iran and Tehran's retaliatory attacks on the United Arab Emirates, Kuwait and Bahrain, war risk premiums for the Persian Gulf were equal to about 0.25% of the value of a ship's hull.
These rates are set to increase by 50% or more, Insurance Business reports , citing market analysts. This would mean that for a $100 million supertanker, the so-called Very Large Crude Carrier (VLCC), the cost of insurance would rise to $400,000 for a single voyage, compared to around $250,000 before the conflict, Insurance Business notes. All of this will weigh on product prices, but it's still better than not sailing at all.
The article The Persian Gulf becomes “terra incognita”: insurance clubs pull the plug on war risk coverage comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/il-golfo-persico-diventa-terra-incognita-i-club-assicurativi-staccano-la-spina-alla-copertura-rischi-di-guerra/ on Mon, 02 Mar 2026 16:05:07 +0000.