Reinsurance capacity remains plentiful in the marine branch and there has not been any bounce in pricing - reinsurers are determined not to lose their hard-fought market share whilst those looking to grow continue to drive helpful competition, according to a report published by Gallagher Re.
In its report titled “First View: Rethinking the Art of the Possible, Gallagher Re outlines current market conditions within the reinsurance industry in the 1 April renewal season.
Mr Nick Croxford, Head of Marine, Energy and Aviation at Gallagher Re, in a section in the report on the Middle East conflict and impacts on marine renewals, said, “An obvious change has been that most clients have approached the market and agreed FOTs far earlier than previous years. In order to mitigate the potential of more complex negotiations under unknown future conditions.
“As the conflict continues, we continue to see interest in back-up and additional aggregate purchases, as clients look to utilise savings in reinsurance budgets to lock in 2026 results."
The ongoing conflict in the Middle East has caused significant disruption to maritime activities. The Strait of Hormuz has been functionally closed since 1 March, with Iran declaring that no ships are allowed to pass. This has had a profound impact on crude oil and LNG (liquefied natural gas) transport in the region.
In response to the heightened risks, many global insurers have issued Notice of Cancellation (NOC) for war and strikes coverage on hull, cargo, and liability policies in the Persian Gulf and Gulf of Oman. While these cancellations align with existing policy terms, insurers can reinstate coverage after the contractual cancellation period at mutually agreed terms, i.e. higher premiums.
However, some insurers are reluctant to reinstate coverage due to concerns over accumulation, treaty event limits, or limited corporate appetite for war exposures. Nevertheless, some major markets, notably London, continue to show an appetite to step in and provide standalone war cover and facultative reinsurance, whether it be for hull & machinery, cargo or liability.
The complexities of the maritime insurance landscape, particularly the interaction between shipowners, charterers, and operators, highlight the critical role of P&I Clubs and their reinsurers in addressing some of these challenges. Gallagher and the broader market have responded with bespoke products to ensure the continued availability of vital insurance coverage for ships operating in the Middle East, as well as working with treaty clients to ensure adequate per event and per risk coverage for the remainder of 2026. This includes addressing the potential 'live cat' related to the blocking and trapping of vessels within the Persian Gulf.