War-risk insurance, explained.

What war-risk insurance actually covers.

Marine insurance for a commercial voyage typically splits into two layers. The base layer (Hull & Machinery, plus Protection & Indemnity) covers ordinary perils: collision, grounding, weather damage, crew claims. War risks are excluded from the base layer and bought separately under a war-risk policy that responds to acts of war, civil war, insurrection, terrorism, capture, seizure, arrest, restraint, detainment, mines, torpedoes, and the destruction of the vessel by an act of state.

The market for marine war-risk cover concentrates at Lloyd’s of London. Lloyd’s underwriters write the bulk of global tanker war-risk premium, and they price that premium against a list of geographic areas where the risk is judged to exceed normal trading conditions. That list is maintained by the Joint War Committee, informally JWC.

How the listed area mechanism works.

The JWC is a panel of underwriters from the Lloyd’s and company markets that meets regularly to designate areas where the threat to commercial vessels has materially increased. When an area is added to the list, hull war-risk policies that touch that area trigger a notification clause: the owner has to tell the underwriter before the vessel enters, and the underwriter is entitled to quote a fresh premium for the specific exposure rather than relying on the annual cover. Underwriters can also cancel war cover at short notice, traditionally seven days and often 48 to 72 hours in recent listings.

That additional premium (the “additional war premium” or AP) is quoted as a percentage of the insured vessel value, applied to the value at risk for the duration the vessel is in the listed area. For a Very Large Crude Carrier worth roughly $80 to $120 million carrying a cargo worth roughly $195 million at current Brent levels, even small changes in the AP rate translate to seven-figure differences per voyage.

The Strait of Hormuz has been a JWC listed area at varying intensities for most of the past decade, with bursts of re-listing through the 2019 tanker incidents, subsequent regional escalations, and the current closure. When the area is “hot,” APs run several multiples of the steady-state baseline; when it cools, they fall back, but never quite to peacetime.

The numbers, in plain figures.

In peacetime, additional war premium for a single Hormuz transit on a VLCC is on the order of $250,000 per voyage, roughly 25 basis points of insured value. (That figure is an editorial midpoint of trade-press quotes, which are voyage-specific and vary with the operator and vessel.) That’s enough to be a real line item but small in the overall economics of a $200-million-class voyage.

In an active closure, trade press quotes for per-voyage VLCC additional premium have run near $10 million (27 July), and one report put it as high as $20 million (FT, 7 October), with frequent intra-day repricing. Insurance is the line item that sets whether the operator can charter the vessel out at all. At those rates, a Cape of Good Hope detour becomes commercially preferable for any cargo whose buyer has any flexibility on delivery date.

The premium multiple tracked on the homepage and the dollar figures above are estimated separately, not derived from one another, so the two will not divide exactly.

Across cargo classes the same scaling applies. Container ship APs are smaller in absolute terms (smaller insured values, smaller cargoes), but the percentage move is similar. LNG carriers carry the largest insured values per voyage and see the largest absolute premium swings.

Why insurance is the leading indicator.

AIS data shows where vessels actually are and where they’re going. It lags the decision: a vessel at anchor today made the decision to wait three days ago when the operator priced the voyage and balked at the premium. Carrier customer-advisory announcements lag too; a public “we are rerouting” statement follows a posture change that’s already been priced. The AP quote leads them both.

That’s why the war-risk insurance multiple is one of the core indicators we track on the homepage. When it spikes, the spot fixtures slow within hours. When it eases, the bid for Hormuz-route cargoes comes back before the vessels actually move.

Clubs that have withdrawn coverage.

The other half of the insurance signal is which P&I clubs and war-risk underwriters have pulled back from Hormuz rather than simply repricing it. The list below names the clubs reported in the trade press as having withdrawn, declined renewals, or imposed strict quotas. Their notices went out on 1 March 2026 and took effect on 5 March, cancelling war cover for charterers and other non-mutual business; buy-backs were offered afterwards. We last re-checked the list on 5 August and haven’t confirmed each club’s present position.

Read it as reported posture, not as a market-wide cancellation. The Lloyd’s Market Association said in March that hull war cover “remains in place and available in the London market” and that the notice sent by liability underwriters covered a limited section of their book, charterers and non-poolable exposures, reviewable case by case. The clubs below write liability, which is a different cover from hull war risk, and we hold no primary document for any individual entry.

• ReportedGard
• ReportedSkuld
• ReportedNorth Standard
• ReportedLondon P&I Club
• ReportedAmerican Club
• ReportedSteamship Mutual

Sources: Lloyd’s List, TradeWinds, Splash247, Reuters maritime desk, individual club circulars. Status is hand-written and edited when the situation moves, not re-verified on a schedule; if an entry has restored cover and we haven’t caught up, email a correction.

What can go wrong with the framing.

Reported AP quotes are not perfectly comparable across publications. They reflect specific underwriter conversations about specific voyages, vessels, and risk appetites. A figure that surfaces in trade press as “the” rate is usually an indicative midpoint, not a published market clearing price; AP markets are quote-driven and frequently voyage-specific. Operators with strong relationships and clean loss histories pay less; spot operators chartering uncovered vessels pay more.

Lloyd’s does not publish JWC pricing as machine-readable data. The figures we surface on the dashboard are an editorial reading of trade-press reporting (Splash247, Lloyd’s List, Reuters Energy, gCaptain) rather than a direct feed. Our methodology page documents this dependency explicitly.

What we watch.

On Straits, the live insurance multiple sits in the at-sea cluster alongside the transit count, throughput percentage, and Brent move. The block turns to the alert color when the multiple crosses 4× the peacetime baseline, the threshold at which spot Hormuz traffic typically becomes uneconomic for anything but the most committed long-term contracts. For a deeper cut on how the rest of the dashboard fits together, the methodology page walks each indicator, including the supplementary-feeds disclosure.