War-risk insurance rates for Hormuz vessels rise amid renewed tensions

War-risk insurance rates for vessels transiting the Strait of Hormuz have risen again amid renewed military escalation in the region, a leading marine insurance expert told Xinhua on Friday, reported Xinhua.

"War-risk rates have moved as risk has moved," said Neil Roberts, head of marine and aviation at the Lloyd's Market Association, a trade association representing underwriting businesses operating in the London insurance market.

"There was a softening when the memorandum of understanding (MoU) between the United States and Iran was signed in June, but an uptick after three vessels were attacked this week," he said.

Separate market estimates indicate that shipowners now face hull war-risk premiums of around 5 percent of a vessel's value for voyages through the Strait of Hormuz, with that level emerging as the new market norm.

War-risk premiums had fallen to about 2 percent following the U.S.-Iran MoU, which temporarily eased hostilities. Earlier in the conflict, however, they had briefly surged to as high as 10 percent before retreating.

Roberts said inquiries from shipowners and brokers increased after the MoU was announced, reflecting expectations of improving security conditions.

However, separate market sources said this week's attacks on three commercial vessels have reversed that trend, driving insurance costs higher once again.

Looking ahead, Roberts said premium levels would remain highly uncertain.

"It would have to be described as variable, given the continuing volatility," he said.

The latest increase in premiums comes amid renewed military exchanges between the United States and Iran following attacks on commercial vessels in the Strait of Hormuz. The International Maritime Organization on Wednesday advised ships to avoid transiting the strategic waterway until the safety and security of crews can be assured.