Singapore shippers face policy cancellations as Iran conflict escalate

Hull and Machinery coverage faces cancellations with reinstatements costing more.

The ongoing conflict in Iran is increasing marine insurance risks in Singapore with Hull and Machinery war risk policies widely cancelled, and reinstatements now require higher premiums.

Protection and Indemnity (P&I) non-mutual war risk coverage has also been withdrawn by IG Clubs, according to Nick Francis, marine partner at global litigation and dispute resolution firm Kennedys.

Singapore’s role as a transshipment centre means any escalation affecting shipping through the Strait of Hormuz or Persian Gulf increases exposure for vessels trading to and from the city-state.

War risk premiums for hull and cargo have risen, and underwriters may impose route-specific approvals, higher deductibles, or additional exclusions and in severe cases, coverage could be withdrawn entirely.

Francis said Singapore-based owners, operators, and charterers need to monitor gaps in war risk coverage, particularly for losses caused by delays, and potential constructive total loss issues for vessels trapped in conflict zones.

The situation is also raising operational costs and supply chain pressures, whilst Singapore insurers and brokers face increased scrutiny over underwriting, aggregation, and capital management.