Impact of Geopolitical Risks on Marine Insurance Premiums

In the midst of ongoing conflict in the Middle East, marine insurance premiums for hull and cargo have risen, though coverage remains available. Approximately $125 billion worth of vessels and cargo are detained in the Persian Gulf, with operations through the Strait of Hormuz still not normalized.

Allianz Research's Safety and Shipping Review 2026 highlights that around 1,150 cargo vessels, transporting 29 million gross tonnes of goods, are held in the Gulf, impacting up to 20,000 seafarers. Allianz emphasizes shipowners' primary concern is the safety of crew and vessels in conflict zones, rather than the accessibility of insurance coverage.

The report underscores the critical role of maritime chokepoints in global trade. Prior to the conflict, approximately 140 vessels passed through the Strait of Hormuz daily. Geopolitical risks, pandemics, and disruptions at key maritime channels increasingly affect global shipping routes and supply chains. Companies are investing in resilience and contingency strategies, despite higher operational costs.

In a positive development, maritime safety indicators have improved. From 2021 to 2025, vessel losses worldwide, for ships over 100 gross tonnes, have shown a steady decline. During this period, 350 total losses were recorded, averaging 70 per year—a 37% reduction compared to the 2016-2020 period. In 2025, there were 43 such losses, involving over 30 ships larger than 500 gross tonnes.

The South China Sea region, including Indochina, Indonesia, and the Philippines, reported the highest number of losses in the past decade, with 255 incidents. Global shipping incidents decreased by approximately 16% in 2025, falling to 2,818 from 3,353 in 2024. The East Mediterranean and Black Sea recorded 622 incidents, followed by the British Isles with 619.

In 2025, machinery damage and failure constituted over half of all shipping incidents, totaling 1,505 cases. Collisions accounted for 260 occurrences, and fires posed significant risks, with over 200 incidents involving large vessels. Notably, nine fire-related incidents resulted in total vessel losses.

The report also notes an increase in the average age of the global fleet to 23 years in 2025, up from 20 years pre-pandemic. Older vessels now account for over half of maritime safety incidents, facing heightened risks for structural and technological issues due to aging.