New Zealand's downgrade of travel advisories for seven Gulf states followed swiftly on from Thursday's US-Iran memorandum of understanding - but the insurance market underpinning both leisure travel and regional trade is moving at a far more cautious pace than the diplomacy.
The Ministry of Foreign Affairs and Trade (MFAT) returned Bahrain, Jordan, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates to Level Two - Exercise Increased Caution, after months at Level Three or Level Four during the conflict, RNZ reported. A ministry spokesperson said advice for the majority of Gulf states had "returned to pre-conflict levels," pointing to the ceasefire, the reopening of the Strait of Hormuz and a possible pathway to lifting sanctions on Iran. Israel, Iran, Lebanon and the Palestinian territories remain at Level Four - Do Not Travel.
The downgrade carries no retroactive weight for travellers caught out earlier this year, and it won't immediately reopen claims for new bookings either. New Zealand's licensed underwriters - including Southern Cross Travel Insurance, Allianz/MSI, nib and World Nomads - universally exclude claims arising from war or armed conflict, according to comparison site MoneyHub.
When strikes closed Gulf airspace in February and March, insurers' main concession was extending existing policies for stranded customers rather than paying out, and once a conflict becomes a "known event," fresh policies typically exclude it outright regardless of advisory level.
Gulf airlines have moved to fill the gap: Emirates, which restored full daily capacity to Auckland on Thursday, has partnered with Zurich-owned Travel Guard on cover that includes conflict-related medical treatment "regardless of government travel advice." Emirates president Tim Clark said the package was designed to be "comprehensive as well as reassuring."
MFAT separately urged travellers to check their own policies for cover relating to "conflict, delays, cancellations and changes to travel advice levels."
The institutional side of the market is even more conservative. Lloyd's Market Association's Joint War Committee expanded its high-risk designation to cover the entire Persian Gulf after the February strikes, and hull war insurance premiums for vessels approaching - though not transiting - the Strait of Hormuz quadrupled to roughly 1% of ship value for seven days' cover, according to S&P Global. All 12 members of the International Group of P&I Clubs, which together cover 90% of the world's oceangoing tonnage, cancelled certain war coverage on 72-hour notice.
Willis Towers Watson's Asia marine head, Lewis Hart, has said premium rates are unlikely to fall immediately despite the ceasefire, with Hormuz traffic expected to normalise gradually rather than all at once.
Brokers in India's marine market told Business Standard that premiums - already easing from a wartime high of 2%–3% of cargo value via the new Bharat Maritime Insurance Pool - could soften further if the ceasefire holds, though insurers cautioned they were unlikely to cut rates immediately.
For both travellers and shippers, the same pattern holds: MFAT can revise its advisory level on diplomatic developments alone, but insurers - consumer and institutional alike - are waiting for sustained, observable safety before they reprice Gulf risk.
