Reinsurers Scrap War-Risk Cover After US Torpedoes Iranian Ship

By Mihir Mishra and Saikat Das

Mar 6, 2026 (Bloomberg) –London-based reinsurers are issuing seven-day cancellation notices on marine war-risk coverage after a US submarine torpedoed an Iranian warship off Sri Lanka, amplifying risk perception, according to people familiar with the matter.

Shipping lines can seek to reinstate coverage through buybacks once policies lapse, but the cost of doing so has surged beyond typical wartime adjustments, the people said, asking not to be identified because the information is private. Rates that usually climb up to 50% in wartime have instead tripled in some cases — rising to $750,000 per vessel from $250,000, they said.

Most policy cancellations have been initiated since Thursday, the people said, adding that premiums vary depending on vessel flag, ownership, and ports of call. Bloomberg News has seen a cancellation notice dated as recently as March 4 — the day a US submarine sank the Iranian warship.

The US submarine attack in international waters — the first time since World War II that an American sub has attacked a surface vessel — has further triggered a surge in risk premiums for hull and related marine coverage. The Indian Ocean strike, far outside the Middle East war zone, underscored fears that the conflict’s impact is widening geographically, the people said.

Read More: Insurance Clubs to Halt Ship War-Risk Cover in Persian Gulf

The worsening situation in the Persian Gulf remains the primary concern, said Hitesh Joshi, executive director with additional charge as chairman and managing director at GIC Re. 

As an immediate impact on the marine war-risk cover, “notices of cancellation are being issued by international marine underwriters,” he said. “The restoration of covers is being carefully considered at much higher rates.”

High-Risk Zones

If hostilities persist for another 10 days, buyback options may no longer be available, the people said. Limited buybacks outside the Strait of Hormuz are still being offered by some London market insurers, said Balasundaram R, head of marine insurance at Policybazaar for Business.

Insurers and reinsurers, he said, have canceled coverages in war-affected areas after GIC flagged its seven-zone hull war-risk plan, effective March 1. The amended plan designates high-risk waters including Pakistan, the Persian Gulf, and Iran, besides territories subject to sanctions by the UN, the UK, the US or EU.

Marine insurers were assessing their exposures and reacting according to the provisions of their contracts which could include giving notice of cancellation, Bloomberg News reported earlier this week citing Neil Roberts, head of marine and aviation at Lloyd’s Market Association.

Cargo insurance has also been affected. War-risk cover for cargo, once about 0.03% of cargo value, has jumped to around 1% in affected zones, the people said.

“As the period of conflict lengthens, it is bound to impact pricing across all risks and liability covers,” Joshi said.

© 2026 Bloomberg L.P.

Editorial Standards · Corrections · About gCaptain

This article contains reporting from Bloomberg, published under license.

Subscribe for Daily Maritime Insights

Sign up for gCaptain’s newsletter and never miss an update

— trusted by our 107,366 members