INSURANCE
Shipping insurers tighten terms as global risks rise
Conflict, climate rules, and emissions compliance reshape marine insurance
Without insurance, the world’s fleets can’t sail. In 2025, marine insurers are raising premiums and embedding new rules as conflict, emissions regulations, and climate risks reshape the sector.
Recent shifts illustrate the pressure:
War-risk premiums spike after Red Sea attacks. Attacks on commercial vessels by Houthi forces pushed Red Sea war-risk insurance to as high as 1% of vessel value in July 2025. Costs have doubled in less than a year, forcing some shipowners to reroute around Africa.
Premiums climb up to 60% across conflict zones. Maritime Executive reported a 60% jump in war-risk premiums for ships in the Red Sea and Persian Gulf. Owners are absorbing millions in added expenses to cover voyages through high-risk waters.
Hull & machinery coverage surges in Gulf. Lloyd’s underwriters raised hull and machinery rates in June 2025, with premiums jumping from 0.125% to 0.2% of ship value. Financial Times noted the steepest hikes in a decade for Gulf-based trade.
Marine Emissions. Image by Marine Digital.
P&I clubs tie cover to emissions compliance. Britannia P&I, with law firm HFW, issued new guidance in early 2025 linking insurance terms to compliance with IMO CII, EU ETS, and FuelEU standards. Owners failing to report emissions risk higher deductibles or exclusions.
Poseidon Principles reshape underwriting. The Poseidon Principles for Marine Insurance released its third Annual Disclosure Report in 2025, showing over 25% of global fleet tonnage now insured under climate-aligned frameworks. Underwriters are benchmarking fleets against decarbonization pathways.
Container vessels face 23% premium hikes. Lockton P.L. Ferrari reported that container ships saw a 23.6% increase in reinsurance premiums during 2025 renewals. Analysts warn costs will be passed along the supply chain, adding pressure to global freight rates.
That’s not all: reinsurers warn that extreme weather-linked claims are rising. As climate change collides with geopolitics, shipping insurance is no longer just about accident risk—it’s about navigating a world of converging shocks.
—TFI
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