US–Iran War Sends Shockwaves through Global Insurance Markets

The escalating confrontation between the United States and Iran is rapidly reshaping global insurance markets, as military operations across the Gulf trigger unprecedented risk levels for shipping, aviation, and energy infrastructure.

Following US strikes on Iranian targets and retaliatory attacks by Tehran on American bases and strategic facilities across Gulf states, the crisis has expanded beyond a regional military clash into a geopolitical shock with global economic implications.

The immediate fallout is being felt across financial markets and transport sectors, particularly in war-risk insurance, which has suddenly moved to the center of the unfolding crisis.

Strait of Hormuz closure transforms military escalation into economic crisis

The situation intensified after Iran announced the closure of the Strait of Hormuz, one of the world’s most critical energy corridors.

Roughly 20% of global oil supply and nearly a quarter of global liquefied natural gas trade normally pass through the waterway, making any disruption a direct threat to global energy markets.

The move has heightened fears of energy shortages, rising fuel prices, and major disruptions to global supply chains.

Shipping companies have already begun implementing emergency measures to reduce exposure to the growing risks in the region.

Freight costs have surged as vessels avoid the Gulf or wait outside the Strait of Hormuz for updated security assessments before attempting passage.

Major shipping companies, including Maersk, have reportedly suspended operations in the Gulf and rerouted vessels around Africa via the Cape of Good Hope, a diversion that adds weeks to shipping times and significantly increases operational costs.

In a separate development, QatarEnergy temporarily suspended part of its liquefied natural gas production following a drone attack on one of its facilities.

The decision carries major global implications, as about 90% of Qatar’s LNG exports normally transit through the Strait of Hormuz, intensifying concerns about a new supply shock in global gas markets.

With the Gulf increasingly classified as an active military zone, insurers have begun rapidly reassessing risk exposure across multiple sectors.

Several maritime insurers have already issued cancellation notices for war-risk coverage for vessels operating in the region.

Among them, Norwegian marine insurer Skuld announced it would terminate war-risk insurance coverage for vessels operating in the Middle East starting March 5, 2026, giving shipowners only 72 hours’ notice due to the escalating security risks.

Similarly, the Arab War Risks Insurance Syndicate suspended coverage for ships transiting the Gulf, the Strait of Hormuz, and the Bab el‑Mandeb Strait.

Insurance experts estimate that war-risk premiums for ships crossing the region could rise between 25% and 50% in the coming weeks.

The risks insurers must now evaluate extend beyond direct missile or drone strikes.

Companies are also factoring in the possibility of vessel seizure, political detention, piracy, and electronic interference, particularly as Iran maintains strategic control over key maritime chokepoints.

According to analysis by international law firm Kennedys, the conflict represents a “rare multi-impact event” capable of affecting several insurance lines simultaneously.

Among the sectors under pressure are marine insurance, due to attacks on vessels and shipping disruptions, aviation insurance, as several countries temporarily closed their airspace following missile attacks, political violence insurance, covering damage to private assets and infrastructure, and trade credit insurance, as rising energy costs and economic instability increase default risks.

The temporary closure of airspace across several Gulf states has disrupted civil aviation, leaving thousands of passengers stranded worldwide.

Missile and drone attacks also raise the risk of damage to airports, grounded aircraft, and other aviation infrastructure, forcing insurers to reassess war-related coverage clauses.

Meanwhile, ports, hotels, energy facilities, and logistics hubs across the region could face growing insurance claims if the conflict continues to escalate.