Marine insurers lose billions supporting Hormuz energy flows: IUMI
Insurance companies have lost billions to cover war risks for shipping during the ongoing US-Iran conflict to support global energy trades, despite a jump in headline premium rates, according to a senior official of the International Union of Marine Insurance. Cargo and hull insurance premiums for Strait of Hormuz transits have risen by tens of ...
Marine insurers have suffered significant financial losses due to their coverage of war risks for shipping during the ongoing US-Iran conflict, which supports global energy trades, according to Lars Lange, Secretary General of the International Union of Marine Insurance (IUMI). The insurance industry reported billions in losses stemming from off-hire and ship damage arising from the war, with estimates reaching up to $2 billion.
Despite premium rates for Strait of Hormuz transits increasing by tens of times since the start of the Middle East war at the end of February, the overall revenue from insurance has declined due to fewer ship crossings through the region. The Strait of Hormuz, which handled 20% of global seaborne oil and LNG flows in peacetime, has seen daily crossings drop to roughly 20, down from over 130 before the conflict.
Despite these losses, marine insurers are expected to continue offering war coverage to serve long-term clients in the energy supply chain. Government measures, such as US reinsurance facilities and Saudi Arabia's marine insurance pool, are being implemented to address the crisis, while organizations like IUMI emphasize the importance of complying with sanctions and clear instructions from governments.
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