Surge in Insurance Costs for Tankers Entering Persian Gulf Amid Geopolitical Tensions
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 11 2026
0mins
Should l Buy MRSH?
Source: Benzinga
- Insurance Cost Surge: Geopolitical tensions have led to a dramatic increase in insurance costs for tankers entering the Strait of Hormuz, with the Additional War Risk Premium (AWRP) skyrocketing from 0.25% to approximately 3%, representing a staggering 1,100% increase, translating to about $3 million in insurance for a single voyage of a modern crude tanker valued at $100 million.
- Cost Pressure on Shipowners: While shipowners are absorbing these higher insurance costs, brokers like New York-based Marsh may benefit, as their fees are tied to the size of the premiums they arrange, meaning that rising war-risk premiums can significantly boost their revenues; Marsh, valued at around $84 billion, is the world's largest marine insurance broker.
- Market Risk Pricing Shift: The surge in tanker insurance costs reflects a broader shift in how markets are pricing geopolitical risk, with approximately 20% of the world's seaborne oil passing through the Strait of Hormuz, making any disruptions in the region a major concern for energy markets, and even stable oil prices can see costs sharply rise due to increasing security risks.
- Financial System Ripple Effects: This dynamic indicates that geopolitical tensions not only impact tanker operators' costs but can also ripple through unexpected areas of the financial system, suggesting that insurance firms may quietly benefit in high-risk environments.
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Analyst Views on MRSH
Wall Street analysts forecast MRSH stock price to rise
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About MRSH
Marsh & McLennan Companies, Inc. is a professional services company in the areas of risk, strategy and people. The Company conducts business through two segments: Risk and Insurance Services, and Consulting. Risk and Insurance Services segment includes risk management activities (risk advice, risk transfer and risk control and mitigation solutions) as well as insurance and reinsurance broking and services. It conducts business in this segment through Marsh and Guy Carpenter. Marsh is an insurance broker and risk advisor, serving companies, institutions and individuals. Guy Carpenter is a reinsurance intermediary and advisor. Consulting segment includes health, wealth and career advice, solutions and products, and specialized management, strategic, economic and brand consulting services. It conducts business in this segment through Mercer and Oliver Wyman Group. Oliver Wyman Group serves as a critical strategic, economic and brand advisor to private sector and governmental clients.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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