Lloyd's of London continues to insure shipping in the Strait of Hormuz despite rising premiums and policy cancellations, ensuring global trade support.
Lloyd's of London stressed that it continues to insure shipping in the Strait of Hormuz despite cancelled policies and steep price rises, as reported by the UK's Guardian.
The insurance market stated that hull and cargo cover remains available for vessels in the Gulf, although restricted areas have been extended and premiums adjusted to reflect heightened risks. Approximately 500 tankers, 500 containerships, and six cruise ships are trapped on either side of the Strait after Iran threatened attacks, with only 66 vessels passing since the war began.
Broker Marsh indicated that war risk premiums for ships have surged to between 1 and 1.5 percent of the insured value, up from 0.25 percent before the conflict. With tankers valued at US$17 million to $100 million, costs per voyage have risen sharply. Analysts at Jefferies noted that most Gulf policies were cancelled and reinstated at higher rates, with exclusions for Hormuz sailings.
The US announced a $20 billion reinsurance facility for hull and cargo cover, although analysts questioned its effectiveness. UK Chancellor Rachel Reeves informed MPs that she was working with Lloyd's, Washington, and allies to reopen Hormuz and ensure insurance products remain available, stressing that crew safety was the greater concern.
Lloyd's chairman Charles Roxburgh stated that the marine insurance market remains open and continues to support global trade. Neil Roberts of the Lloyd's Market Association mentioned that war insurance is negotiated dynamically between underwriters, insureds, and brokers, with rates reflecting the new risk profile.
