The announcement on 7 April of a two-week ceasefire between the US and Iran marks a critical moment of de-escalation of the intense geopolitical tension in recent weeks that brought the region to the brink of a wider conflict, according to Mr Hani Kurdi, Vice President - Marine at APEX.
In a commentary posted on Mr Kurdi’s LinkedIn account on 8 April, he outlines key perspectives on the current situation and highlights potential future outcomes.
Commenting on the ceasefire, he wrote, “One fact remains clear—This is a pause, not a resolution.”
Current Situation: A fragile stability
The ceasefire is temporary (two weeks) and conditional, which signifies the fragility of the situation. During this period, key geopolitical issues remain unresolved; Iran is pushing for long-term guarantees and economic concessions; and shipping routes are reopening — but under heightened control and uncertainty.
From an insurance perspective, the industry is currently in a phase of “stabilised volatility” — not normalcy.
Future scenarios
From insurance perspective, there are three scenarios to expect in the coming period, depending on the period under review:
1. Short-term scenario (0–4 weeks): Tactical relief
· War risk premiums may soften slightly, but remain elevated
· Underwriters will stay cautious and reactive
· Increased use of voyage-based underwriting and short-term covers
Market behaviour: Opportunistic, not confident.
2. Medium-term scenario (1–6 months): Managed uncertainty
· If tensions persist without escalation, this will lead to continued high volatility in pricing, increased reliance on reinsurance capacity and more restrictive clauses (e.g. War Cancellation, exclusions)
· If ceasefire collapses, this will result in immediate hard market spike and possible withdrawal from high-risk zones
Market behaviour: selective and defensive.
3. Long-term scenario (6–18 months): Structural shift
Even if peace is achieved, the market will not revert to “pre-war conditions”. Markets are likely to see permanent repricing of geopolitical risk; and increased use of stock throughput structures and parametric and hybrid covers.
Another outcome expected is seeing a stronger integration between marine, energy, cyber and political risk.
Market behaviour: More complex, more analytical and less predictable.
Key insurance implications
- War risk is now systemic, not limited to geography – it affects global supply chains.
- Coverage gaps will increase especially during route deviations, temporary storage and delayed shipments
- Pricing is event-driven – less historical, more real-time
- Reinsurance is the real driver: capacity decisions will define market direction
Dealing with the new normal
Eventually, the biggest shift is not in the risk itself but in how the industry perceives and manages it. The question is no longer whether the industry can cover these risks but rather how they can be insured sustainably in a constantly shifting geopolitical landscape.