London’s marine insurance market has widened the area in the Gulf it deems as high risk as the conflict in the Middle East escalates, according to an advisory issued on Tuesday.
Guidance from the Joint War Committee, which comprises syndicate members from the Lloyd’s Market Association and representatives from the London insurance company market, is watched closely and influences underwriters’ considerations over insurance premiums.
The JWC added waters around Bahrain, Djibouti, Kuwait, Oman and Qatar to high-risk areas, the statement showed.
Read more: Marine Insurers Cancel War Risk Cover as Iran Conflict Escalates
The JWC agreed to revise the areas at a meeting on Monday “in light of recent events,” the committee’s secretary Neil Roberts said in a statement, adding that the geographical areas were among those assessed where vessels were at “increased risk of war-related perils.”
Gulf war risk premiums have risen fivefold in recent days compared with a week ago – before the U.S and Israel began their airstrikes on Iran – adding hundreds of thousands of dollars in extra costs for every shipment.
Expanding the high-risk area of waterways to connect with other parts of the Gulf region was viewed as a way to close gaps where war‑risk insurance had not previously applied, leaving ships exposed without adequate cover, industry sources said on Tuesday.
“The expanded designation (by the JWC) … helps stabilize global supply chains by reducing uncertainty around the movement of energy, commodities and essential goods,” said Munro Anderson of marine war insurance specialist Vessel Protect, part of Pen Underwriting.
(Reporting by Jonathan Saul; editing by Susan Fenton and Ros Russell)
Photograph: In May 2021, a giant container ship sails near Iranian coastline in the Strait of Hormuz; photo credit: Depositphoto
