The escalating geopolitical conflicts in regions such as the Red Sea and Strait of Hormuz are driving up insurance premiums, forcing insurers to adapt to a more fragmented and high-risk maritime environment amid shifts in global trade patterns.
Geopolitical conflicts and the consequent reconfiguration of global trade routes are transforming the marine insurance sector, presenting both challenges and new opportunities. Addressing the International Union of Marine Insurance (IUMI) conference in Singapore, IUMI President Frédéric Denèfle warned that the era of seamless globalisation is drawing to a close, ushering in a more complex and fragmented maritime environment.
Denèfle highlighted that the slowdown in globalisation, which had been emerging over recent years, has accelerated post-COVID due to escalating trade tensions and regional conflicts. These include the ongoing war in Ukraine and the confrontations in the Red Sea, where hard national interests increasingly override international cooperation and economic integration. “What we are facing is not the end of global trade but the beginning of a new era,” he said, urging marine insurers to adapt by embracing innovation and strategic diversification.
This evolving global landscape is compelling vessels to avoid high-risk regions, such as the Red Sea and the Strait of Hormuz, often taking longer, costlier routes. Denèfle pointed to a resurgence of inland transport options and nearshoring trends, driven by the need to reorganise supply chains to mitigate risk and inflationary pressures. Marine insurers are also turning to artificial intelligence and new trade corridors, while investing in shore-side infrastructure to support this changing maritime environment.
Recent incidents underline these dynamics. Insurance premiums for shipping through the Red Sea have more than doubled since mid-2025, a direct response to renewed Houthi attacks on vessels perceived to have links to Israel. These attacks have resulted in the sinking of ships, multiple fatalities among crews, and a heightened war risk premium reaching up to 1% of a ship’s value, translating into millions in increased insurance costs for large vessels. Such spikes force underwriters to reconsider coverage terms, particularly for vessels navigating strategically vital but volatile corridors like Bab al-Mandab and the broader Red Sea region.
Similarly, the Strait of Hormuz has seen a 60% surge in insurance premiums amid escalating Israeli-Iranian tensions, with costs increasing from 0.125% to 0.2% of ship values. The strategic importance of this corridor, which handles about 20% of global energy supplies, means any instability has outsized implications for shipping safety, insurance markets, and global energy prices. Incidents including a collision between oil tankers with irregular navigational signals have further exacerbated insurer concerns, prompting some to withdraw coverage while others raise premiums to offset heightened risks.
The broader economic impact of these geopolitical tensions is substantial. Lloyd’s of London projected that prolonged conflict affecting global shipping lanes could cost the world economy up to $14.5 trillion over five years. This scenario considers not only direct damage to maritime infrastructure but also the ripple effects of disrupted supply chains, impacting goods movement on a massive scale given that over 80% of global trade is transported by sea.
Against this backdrop, the marine insurance sector remains resilient. Denèfle reassured that financial ratings for marine insurers are robust and trust in the sector endures. However, he acknowledged that a sharp downturn in international trade could pressure premium volumes, requiring a revisiting of underwriting strategies. The sector’s historical adaptability to shifting risk environments, combined with innovation and strategic foresight, will be critical in navigating the new realities of maritime commerce.
In summary, the marine insurance industry is confronting a brave new world marked by geopolitical fragmentation, rising premiums in high-risk regions, and evolving trade patterns. These changes challenge traditional practices but also open avenues for technological integration and strategic realignment. As the global trade system undergoes a fundamental shift, marine insurers must evolve to maintain their pivotal role in facilitating international commerce.
📌 Reference Map:
Source: Noah Wire Services
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The narrative presents recent developments in marine insurance, particularly concerning the Red Sea and Strait of Hormuz, with specific incidents and data from mid-2025. The earliest known publication date of similar content is from July 2025, indicating that the report is based on recent events and includes updated data. However, the narrative also references a press release from September 2024, which may have been recycled. This suggests that while the report is timely, it may incorporate older material, potentially affecting its freshness. Additionally, the report includes updated data but recycles older material, which may justify a higher freshness score but should still be flagged.
Quotes check
Score:
7
Notes:
The report includes direct quotes attributed to IUMI President Frédéric Denèfle. A press release from September 2024 contains similar statements, suggesting that these quotes may have been reused. However, no earlier instances of these exact quotes were found online, indicating that they may be original or exclusive content. The slight variations in wording between the 2024 press release and the current report suggest potential updates or adaptations.
Source reliability
Score:
6
Notes:
The narrative originates from Cyprus Shipping News, a niche publication focusing on maritime industry news. While it provides detailed coverage of marine insurance topics, its limited reach and lack of broader recognition raise questions about its reliability. The report also references a press release from the International Union of Marine Insurance (IUMI), a reputable organisation, which adds credibility to the information presented.
Plausability check
Score:
8
Notes:
The claims regarding rising insurance premiums in the Red Sea and Strait of Hormuz align with recent reports from reputable sources. For instance, a Financial Times article from July 2025 discusses the surge in insurance premiums due to Houthi attacks in the Red Sea. Similarly, a Reuters report from June 2025 highlights the increase in war risk insurance costs in the Middle East amid escalating tensions. The narrative’s inclusion of specific incidents, such as the sinking of the Eternity C and the Sounion tanker, further supports its plausibility. However, the lack of coverage from other reputable outlets on some of the more detailed claims suggests that the report may be based on limited sources, which could affect its overall credibility.
Overall assessment
Verdict (FAIL, OPEN, PASS): OPEN
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The narrative presents timely information on the challenges facing the marine insurance sector due to geopolitical tensions, supported by recent data and incidents. However, the reliance on a niche publication and the recycling of older material from a 2024 press release raise concerns about the freshness and reliability of the content. The lack of coverage from other reputable outlets on some of the more detailed claims suggests that the report may be based on limited sources, which could affect its overall credibility.
Supercharge Your Content Strategy
Feel free to test this content on your social media sites to see whether it works for your community.
