Shipping insurance costs soar due to Iran tensions
Shipping insurance just got a lot pricier thanks to rising tensions in Iran.
Lloyd's of London says war risk premiums for ships have jumped up to 7.5% as threats like missile attacks and ship seizures increase.
This isn't just industry talk: it's shaking up how global shipping works.
Insurers are feeling the heat
Shipowners are now facing massive insurance bills, with some oil tankers paying $7 to $9 million per trip instead of the usual $600,000.
To avoid risky hotspots like the Strait of Hormuz, some are rerouting around Africa, even though it takes longer.
Cargo insurance rates have also spiked from 0.03% to about 1%, making it more expensive to move valuable goods worldwide.
A new normal for shipping
With these sudden changes, insurers are reworking how they price risk for the long haul, so we could be seeing a new normal for shipping and global supply chains going forward.