Howden Re has warned that continued instability around the Strait of Hormuz is beginning to reshape conditions in several specialty insurance and reinsurance markets. While overall global reinsurance capacity is still described as healthy, the broker said pressure is rising across marine, energy and political violence classes as underwriters respond to mounting geopolitical uncertainty.
The firm said the changing environment is already affecting pricing, underwriting discipline and risk selection in business tied to maritime and regional energy exposures. In particular, covers such as marine hull war, cargo war, offshore energy and political violence are facing more scrutiny as disruption in the region intensifies.
Specialty lines face sharper pressure
In its report Strait of Hormuz update: Market implications of an evolving risk landscape, Howden Re said conditions have worsened in lines most closely connected to shipping and energy transit. The broker pointed to a major drop in vessel movements through the Strait, crude oil climbing above $100 per barrel, and insurers widening designated high-risk areas while lifting war-risk premiums.
According to Howden Re, global oil trade flows have fallen by more than 60% since tensions escalated. Rerouting, added security measures and operational disruption are increasing costs across logistics networks. The report described the pressure on marine hull war, marine cargo war and political violence business as extreme, with claims uncertainty, attacks on infrastructure and premium escalation all contributing to a more difficult market.
The broker also said recent major losses, including the Baltimore Bridge disaster, have added to concern over accumulation risk and complicated liability exposure spanning marine and infrastructure-related business.
Market remains open, but underwriting is stricter
Richard Miller, Managing Director for Marine, Energy and Political Violence at Howden Re, said the Strait of Hormuz remains one of the world’s most strategically important maritime chokepoints. He noted that disruption in such a critical location can quickly trigger rerouting pressure, delivery delays and reduced supply-chain flexibility, prompting a broader reassessment of geopolitical accumulation risk across exposed portfolios.
He added that although war-risk pricing has moved sharply upward, the deeper issue is the persistence of volatility, uncertainty around claims development and the strain this creates for specialty insurers already dealing with significant recent losses, including the Baltimore Bridge event.
Howden Re further noted that the latest developments are sharpening industry attention on aggregation exposure and the potential for longer-tail claims, especially where marine risks intersect with infrastructure and contingent exposure.
Andy Foot, also Managing Director for Marine, Energy and Political Violence at Howden Re, said the market has continued to function during the crisis, which he described as significant. However, he stressed that capacity remains available, but underwriting scrutiny has increased materially, especially for transit risks, war and terrorism/political violence aggregates, and contingent accumulation scenarios.
Broader reinsurance capacity still holding firm
Despite worsening conditions in the most affected classes, Howden Re said the broader reinsurance market remains well capitalised. Treaty capacity is still broadly sufficient, and pricing during the latest April renewals was largely in line with January outcomes. Even so, reinsurers are monitoring inflation, as well as the possibility of weaker underwriting performance in marine and specialty books.
The broker said the effects of the Strait of Hormuz disruption are now extending beyond insurance markets. Rising commodity prices, strain on global energy transportation and higher construction costs are beginning to influence wider economic conditions. It also noted that OECD growth forecasts have been revised downward as economies absorb more expensive energy inputs and tighter supply dynamics.
Michelle To, Managing Director of Business Intelligence at Howden Re, said the crisis shows how geopolitical conflict can rapidly become a multi-line, macroeconomic insurance event. She said the consequences are not limited to specialty classes or Middle East regional markets, and that broader effects across global supply chains could eventually influence many other lines of business.
She added that the situation is also testing how effectively the insurance industry can model interconnected geopolitical and economic risk. According to To, clients are placing greater emphasis on resilience planning, scenario analysis and identifying concentrations across international operations.
Howden Re concluded that the current shock is still manageable within the global reinsurance system. However, it warned that if disruption persists or escalates further along key shipping routes, market conditions could shift much more significantly before the end of the year.
