Insurers to cancel policies and raise prices for ships in Gulf and Strait of Hormuz

Major insurers are canceling policies and hiking premiums for commercial ships transiting the Gulf and Strait of Hormuz, effective February 2026, citing escalating geopolitical risks and recent attacks on vessels. The price surges—reportedly up to 500% for war-risk coverage—target tankers and cargo ships, disrupting global oil and trade routes that handle 20% of the world’s crude exports daily. Underwriters, including Lloyd’s of London syndicate members, are withdrawing capacity or imposing strict exclusions, forcing shipowners to seek costly last-resort coverage from specialized war-risk pools. Analysts link the moves to a spike in drone and missile strikes on vessels since late 2025, with insurers labeling the region “uninsurable” without government-backed guarantees or military escorts. Industry groups warn the shifts could trigger supply chain delays, higher fuel costs, and rerouted shipments, deepening inflationary pressures amid already strained global trade networks.