Marine insurance faces higher risks as wars drive premiums up
Red Sea attacks pushed war risk premiums to 0.7% of vessel value.
Geopolitical tensions, conflicts, and sanctions are changing risk assessments in the marine insurance market as insurers reassess risk models, pricing structures, and coverage terms for global shipping operations.
The 2026 Xinhua-Baltic International Shipping Centre Development Index said that the global marine insurance market was valued at around $31.8b in 2025 and is projected to exceed $42b by 2035, supported by growth in cargo volumes and vessel activity.
However, rising geopolitical risks have increased exposure for insurers covering vessels operating across key maritime corridors.
The Red Sea, Black Sea, and parts of the Middle East have faced security risks, including vessel attacks, detentions, and disruptions to commercial shipping.
The report said many shipowners have continued to reroute vessels to avoid the most exposed areas, increasing voyage times, fuel consumption, and insurance costs.
In July 2025, the Liberian-flagged bulk carrier Magic Seas was attacked in the Red Sea using missiles, sea drones, and small-arms fire, with the 22-person crew abandoning the vessel before it sank.
A day later, the bulk carrier Eternity C was targeted in a similar attack involving drones and rocket-propelled grenades, resulting in crew casualties before the vessel sank.
“War risk premiums for vessels transiting the region rose from roughly 0.3% of a ship’s value to around 0.7% in some cases, meaning a $100m vessel could face an additional $700,000 in insurance costs for a single voyage,” the report said.
Some insurers also began requiring additional risk assessments for vessels seeking cover in affected areas, reflecting a shift in underwriting practices as shipping operators balance safety concerns, operating costs, and route efficiency.
Sanctions have created further challenges for marine insurers, with restrictions on trade contributing to the growth of “shadow fleets.”
These vessels often operate with unclear ownership structures and limited transparency, creating difficulties in verifying vessel history, ownership, and compliance.
The report cited data from Kpler, showing that 562 tankers loaded Russian oil in the past year, representing 57% of vessels involved in these shipments and carrying around 2.3 million barrels per day of crude exports.
Sanctions enforcement has increased scrutiny of tanker operations.
“In December 2025, the US’ seizure of a supertanker carrying Venezuelan crude highlighted the risks facing operators, with more than 30 sanctioned ships identified as operating in Venezuelan waters and more than 80 tankers waiting offshore to load oil,” it said.
Decarbonisation efforts are also shaping underwriting considerations as alternative fuels such as ammonia and hydrogen move towards commercial deployment.
The adoption of fuels such as ammonia and hydrogen requires insurers to evaluate safety, operational, and regulatory risks.
Geopolitical developments are expected to remain a key factor shaping marine insurance as conflicts, sanctions, regulatory developments, and technological risks continue to influence underwriting models and risk pricing.
