London Marine Insurers Extend Gulf High-Risk Zones

LONDON, 3 March (Reuters) – London’s marine insurance sector has broadened the Gulf regions it considers high-risk following escalating hostilities in the Middle East, according to an advisory released on Tuesday. The move reflects growing concerns among underwriters about potential threats to vessels navigating these strategic waterways.

The guidance comes from the Joint War Committee (JWC), which comprises syndicate members from the Lloyd’s Market Association and representatives of the London insurance market. Its advisories carry substantial influence over the setting of premiums for marine war-risk insurance, and underwriters monitor its statements closely.

In the latest update, the JWC designated the waters surrounding Bahrain, Djibouti, Kuwait, Oman, and Qatar as high-risk zones. Neil Roberts, secretary of the committee, explained that the areas were identified following assessments of regions “where vessels are at increased risk of war-related perils.” The decision was made at a JWC meeting on Monday, “in light of recent events,” signalling a direct response to intensifying regional tensions.

Industry sources indicated that the expansion of the high-risk zone is aimed at closing coverage gaps where war-risk policies previously offered limited protection. Without such adjustments, vessels operating in these waters could face exposure without adequate insurance cover.

The market reaction has been swift. Gulf war-risk premiums have surged fivefold over the past week, largely following the commencement of U.S. and Israeli airstrikes on Iran. For major shipments, this translates into hundreds of thousands of dollars in additional insurance costs per voyage.

Marine insurance experts argue that the expanded designation helps stabilise global supply chains, particularly for energy and commodities. Munro Anderson of Vessel Protect, a marine war insurance specialist under Pen Underwriting, said:
“The expanded designation by the JWC helps reduce uncertainty around the movement of energy, commodities, and essential goods, ultimately supporting continuity in international trade.”

Overview of Newly Designated High-Risk Gulf Areas

With the escalation in regional hostilities, analysts warn that marine insurers may continue adjusting coverage zones in response to military developments, potentially further affecting shipping costs and global trade flows.