Strait of Hormuz insurance premiums surge after Iran blockade

After Tehran blocked the Strait of Hormuz on Feb. 28 in retaliation for U.S. and Israeli attacks, the global maritime insurance market reacted sharply. Underwriters at Lloyd’s of London and brokers such as McGill & Partners and Marsh said war‑risk premiums jumped from the pre‑conflict 0.25‑0.5% of a vessel’s value to as high as 10%.

For a tanker worth US$100 million, the premium for a single passage could reach US$10 million. Hull‑war coverage later settled back to 1‑3% of vessel value, and some insurers now offer a “no‑claims bonus” that refunds half the premium if a ship crosses the strait without incident.

Insurers are pricing policies on a very short timeline – often within six hours of a ship’s request – and the contracts remain valid for only three to seven days. One broker recounted a ship that secured coverage in six minutes and received the certificate on deck within ten minutes. The market monitors risk almost hour‑by‑hour, adjusting rates as the geopolitical situation evolves. Since the conflict began, the International Maritime Organization reports at least 14 seafarers have been killed, though no vessel has yet been recorded as destroyed in the current “Book of Losses”.