The ongoing conflict between the US and Iran is causing more than just physical damage—it’s creating a wave of insurance headaches linked to delays, cancellations, and rerouted journeys. This situation is hitting the marine and shipping sectors especially hard, as stuck ships and halted routes add layers of risk that insurers and brokers are watching closely.
Lewis Hart, head of marine for Asia at Willis Towers Watson, points out that the real issue now is the growing risk from delays and disruptions around key ports and narrow waterways like the Strait of Hormuz. Maritime traffic here has essentially come to a standstill, with many valuable ships clustered in the area. Shipping giant Maersk has stopped accepting certain sensitive cargo in and out of Gulf markets and paused bookings between the Indian subcontinent and the upper Gulf, including the UAE, Bahrain, Qatar, Iraq, Kuwait, and parts of Saudi Arabia.
This disruption isn’t just about ships being unable to move. It’s also about what happens to insurance claims when voyages are extended, cargo is diverted, or routes are canceled. Brokers stress the importance of checking insurance policies carefully, especially for “war risks” coverage. Nick Francis from Kennedys highlights a tricky gap: many cargo insurance plans don’t cover losses caused by delays, only direct physical damage. There’s also concern about ships stuck in the Gulf for long periods. If vessels remain stranded beyond 12 months, insurers might face “constructive total loss” claims.
The scale of the exposure is significant. Phil Smaje of Aon estimated there were about 750 vessels worth around $25 billion in the Persian Gulf when the conflict started on February 28. Insurers are also watching related risks at nearby aviation hubs like Dubai, where flight cancellations and rerouting are already adding strain and costs.
The ripple effects of these disruptions are wide. Cruise lines are canceling voyages in the Gulf and Mediterranean. MSC Cruises canceled the last three winter season sailings of the MSC Euribia from Dubai, offering full refunds. AROYA Cruises also stopped its remaining Arabian Gulf trips this season, safely disembarking all passengers in Dubai. Even European cruises are affected; for example, two Iconic Aegean departures on Celestyal Discovery were canceled due to difficulties returning the ship from the Gulf.
For insurers, the claims from cruise cancellations cover multiple areas: passenger refunds, trip curtailments, repatriation, crew transport, accommodation, changes to itineraries, and potential supplier disputes. These costs add up as the conflict disrupts areas beyond the direct war zone.
As this situation continues, the balance between underwriters and shippers will play a big role in how and when normal maritime and aviation traffic resumes. With assets stuck and delays piling up, insurers and brokers remain on high alert, watching for the next wave of challenges tied not just to physical losses but to the widespread interruptions shaking global supply chains and travel plans.