FINANCE

Hormuz Insurance Crunch Sends Shipping Costs Soaring

Published: Mar. 25, 2026 1:11 p.m. GMT+8

00:00

00:00/00:00

Listen to this article 1x

War risk insurance for ships crossing the Strait of Hormuz has surged in cost and become intermittently unavailable after a conflict involving the U.S., Israel and Iran began in late February, disrupting global shipping.

Premiums for a single transit have risen from about 0.25% of a vessel’s value before the conflict to as high as 4%–10%, while insurers at times withdraw quotes entirely, industry participants told Caixin.

You've accessed an article available only to subscribers

Subscribe today for just $.99.

VIEW OPTIONS

Unlock exclusive discounts with a Caixin group subscription — ideal for teams and organizations.

Subscribe to both Caixin Global and The Wall Street Journal — for the price of one.

Share this article

Open WeChat and scan the QR code

DIGEST HUB

Digest Hub

Back

Explore the story in 30 seconds

War risk insurance premiums for ships in the Strait of Hormuz rose from 0.25% to as high as 4–10% of vessel value after conflict involving the US, Israel, and Iran in late February 2024.
Insurance coverage has become volatile, with some routes temporarily uninsurable as attacks on ships prompted the International Group of P&I Clubs to suspend standard cover.
The US proposed a $20 billion reinsurance program, but industry concerns remain over insurance availability and shipping disruptions.

AI generated, for reference only

Who’s Who

U.S. International Development Finance Corp.: The U.S. International Development Finance Corp. (DFC) is supporting a proposed $20 billion reinsurance program. This initiative aims to stabilize the war risk insurance market, particularly amid disruptions in global shipping, with Chubb acting as the lead underwriter.

Chubb: Chubb serves as the lead underwriter for a proposed $20 billion reinsurance program. This U.S.-backed initiative aims to stabilize the war risk insurance market, which has seen disruptions and surging premiums for ships crossing the Strait of Hormuz.

AI generated, for reference only

What Happened When

Before late February 2026：: War risk insurance premiums for the Strait of Hormuz were about 0.25% of a vessel’s value.

Late February 2026：: A conflict involving the U.S., Israel, and Iran began, disrupting global shipping through the Strait of Hormuz.

From March 5, 2026：: The International Group of P&I Clubs (IG) invalidated existing war risk insurance policies after a London market update expanded the high-risk zone.

March 10-12, 2026：: Attacks on commercial vessels occurred, including damage to a ship linked to Chinese ownership.

March 13, 2026：: Insurers halted quoting war risk insurance before later resuming at higher rates.

As of March 2026：: Insurance pricing for transiting the Strait of Hormuz remained volatile, with both premium surges and periods when quotes were unavailable.

AI generated, for reference only