Hull war insurance premiums for vessels passing through the Strait of Hormuz have fallen by more than half in under a week. The ceasefire between the US and Iran signed on June 17 is pulling nervous capacity back into the market, with rates dropping from roughly 5% of a vessel's value to around 2% after discounts, according to brokers cited by the Financial Times. Individual ships are saving hundreds of thousands of dollars per transit compared with the worst of the crisis.
At least 172 ships have passed through the strait since June 18, according to ship-tracking firm Kpler. MarineTraffic data shows transits tripled to 93 last weekend compared with the prior comparable period, but that remains far below the pre-war level of more than 100 ships transiting daily. Among them was the MSC Qingdao, a container ship operated by MSC, which transited on June 20 with its automatic identification system (AIS) transponder broadcasting its position openly, a gesture of confidence from a company that had two vessels taken hostage by Iranian forces during the conflict.
Marcus Baker, global head of marine, cargo and logistics at Marsh, described the current picture carefully. Conditions had improved since the US and Iran pledged to extend their ceasefire, he told the Associated Press, but "there is a degree of nervousness around the situation." On the availability of cover he was more positive: "As far as the insurance position is concerned, there's a good deal of support for ship owners that are trying to move out." His caution extended to the deal itself. "We'll see what the next six weeks brings us," he said.
The return of capacity needs context. Even at 2%, hull war premiums remain roughly 20 times above the pre-conflict baseline of around 0.1% of vessel value, a level so nominal that underwriters barely tracked it before war broke out in February.
One detail in the current picture stands out. While hull war rates have responded to the ceasefire, war cargo insurance - covering commodities including oil and grain - has remained broadly flat, brokers told the FT. The divergence reflects how differently underwriters treat the two risks. Hull cover is priced on a vessel's physical exposure during a given transit window. Cargo cover is priced on a longer assessment of route stability and loss history, and those metrics have barely shifted since the memorandum of understanding (MOU) was signed.
"The longer this [US-Iran agreement] continues without incident, rates will continue to improve," said James Reason, a broker at WTW. He added a caveat with direct relevance for underwriters: "Everyone remains cautious, however, and there are still reports of mines in parts of the Strait of Hormuz transit corridors."
That caveat is well-founded. The IRGC Navy issued a direct warning to shipowners on June 24, stating that any transit route established without coordination with Tehran is "unacceptable and dangerous" and that enforcement action could follow against vessels ignoring its instructions. The demining commitment in the MOU covers only the first month of the 60-day ceasefire window, the main central route through the strait remains mined and closed to commercial traffic, and ships are being routed through narrower northern and southern corridors. As Insurance Business UK reported when the MOU was signed an unnamed Singapore-based underwriter captured the London market's institutional memory on post-conflict repricing in a phrase that has circulated widely: premiums are "quick to go up, slow to come down."
Neil Roberts, head of marine and aviation, Lloyd's Market Association, in a market statement, March 23, 2026 said: "The reason ships are not moving is not through a lack of insurance; it is a question of the risk to crew and vessel safety being assessed by the ship masters and owners as too high."
The rate movement this week partly corrects a misreading of the market that caused real damage during the conflict. When US and Israeli strikes began on February 28, early reports suggested marine war risk insurers had withdrawn cover from the Persian Gulf entirely. As this publication reported in May, that account was substantially wrong.
The Lloyd's Market Association (LMA) issued a formal correction on March 23, stating that cover had remained available throughout. A survey of key London market participants found 88% retained appetite to write hull war risks, with over 90% willing to write cargo. The market, as underwriters told this publication, was functioning as designed. What changed was price, not availability. At peak, insuring a $300 million tanker for a single Hormuz transit had risen from under $400,000 before the crisis to between $6 million and $15 million, with US-nexus very large crude carriers (VLCCs) attracting quotes at the top end, according to Lloyd's List intelligence.
The misconception had direct policy consequences. The Trump administration moved to establish a $40 billion government-backed reinsurance facility through the US International Development Finance Corporation, with Chubb as lead underwriter. Not a single ship used it. The market had not needed rescuing. It had needed confidence that transits were physically survivable.
The current rate improvement may yet be complicated by a development running alongside the premium news. Iran's Persian Gulf Strait Authority (PGSA) has published terms requiring ships to register with the agency and obtain Iranian-approved insurance as a condition of transit, a move London underwriters described to this publication as commercially and legally unworkable. The PGSA has been designated by the US Office of Foreign Assets Control (OFAC), meaning any shipowner paying it for insurance cover would be transacting with a sanctioned entity. The 60-day toll-free window under the MOU sidesteps the problem for now, but the MOU is explicit that fees may apply after day 60.
Calvin Gray, global head of marine at Intact Insurance, told Insurance Business UK that "capacity remains available, but it will be deployed selectively, based on real-time assessments of risk rather than political announcements." Rates are moving in the right direction. Whether they can sustain that movement through the full 60-day window is a question underwriters will answer one transit at a time.
One structural question will outlast this ceasefire. As reported here last week Howden Re's view is that the Red Sea crisis of 2024–25 and the Hormuz crisis of 2026 together represent a permanent upward reset of the marine war risk baseline. Underwriters will require the formal removal of the Joint War Committee's (JWC) listed-area designation, sustained evidence of incident-free passage, and a settled geopolitical picture before rates retreat in any meaningful way. Capital Economics estimates that around 80% of normal Hormuz energy flows will not return before September, and that assumes no further disruption in the interim, as group chief economist Neil Shearing has noted. Helima Croft, head of global commodity strategy at RBC Capital Markets, has warned clients that pre-war transit levels may represent "the high point for the foreseeable future" if Iran retains operational control of the waterway.
For shipping companies whose tankers have been at anchor for four months, the halving of hull war rates this week is real relief. For the London market professionals who kept writing cover throughout, it confirms what they said in March when the misconception was at its loudest: the market never broke. It just got very expensive.
