Lloyd's of London maintains maritime insurance in the Strait of Hormuz despite rising risks and premiums, ensuring continued market presence.
According to a report by The Guardian, the London-based insurance giant Lloyd’s of London has announced that it will continue to insure maritime transportation in the region despite the increasing risks in the Strait of Hormuz. Choosing to maintain its market share despite canceled policies and rapidly rising premium costs in the area, the company continues to provide coverage for shipments in the strait, which is one of the critical points of global trade.
The insurance market indicated that hull and cargo coverage for vessels operating in the Gulf is still available, but the restricted areas have been expanded and premiums have been adjusted to reflect the increasing risks. Following Iran's threats of attack, approximately 500 tankers, 500 container ships, and six cruise ships have been stranded on both sides of the strait, with only 66 vessels able to transit since the onset of the war.
Insurance broker Marsh McLennan noted that war risk premiums for ships have risen from 0.25% prior to the conflict to a range of 1% to 1.5%. The costs per voyage for tankers valued between 17 million and 100 million US dollars have significantly increased. Jefferies analysts stated that most policies for the Gulf have been canceled and restructured at higher rates, with exclusions added that exclude Hormuz transits.
The United States announced a $20 billion reinsurance program for hull and cargo insurance; however, analysts questioned its effectiveness. UK Chancellor Rachel Reeves emphasized in a statement to Parliament that Lloyd’s is working with Washington and allies to reopen the Strait of Hormuz and keep insurance products accessible, while crew safety remains a greater concern.
Lloyd’s Chairman Charles Roxburgh stated that the marine insurance market continues to remain open and supports global trade. Neil Roberts expressed that war insurance is being dynamically negotiated among insurers, insured parties, and brokers, with rates determined according to the new risk profile.
Source: SeaNews Türkiye
