When conflict flares in key shipping arteries such as the Strait of Hormuz, insurers do more than watch from afar - they prepare.
For Capt. Rahul Khanna, former master mariner and now global head of marine risk consulting at Allianz Commercial, the current threats in the Gulf are no abstract matter. They are part of his professional history.
“I sailed for about 14 years, mostly on oil tankers through that region,” he said. “Having been on the bridge, making split-second decisions that could be life or death, I understand what the captains and crews are going through today.”
The Strait of Hormuz, through which a significant proportion of the world’s oil supply passes, has become a flashpoint amid the latest escalations between Iran and Israel. In these waters, shipmasters must constantly weigh the demands of commercial urgency against operational safety.
“There’s immense pressure from cargo owners and shipowners to keep moving,” Khanna said. “But war is something you can't train for when you're a civilian mariner. The stakes are extreme, and newer threats like GPS spoofing just add to the unpredictability.”
Such realities inform the risk advice now being offered. “We recommend alternative routing around the Cape of Good Hope for sensitive or high-value cargo,” he said. “It's more expensive, but sometimes that’s the only sensible option.”
War risk insurance - distinct from standard hull and machinery cover - is again under the spotlight. As Lloyd’s updates its list of conflict zones, insurers are recalibrating pricing models in response to shifting risk profiles.
“These are not rapid changes, but the structure is clear,” said Khanna. “Additional premiums are charged when a war zone is declared. Cargo owners, too, face rising costs, especially when transporting irreplaceable components or sensitive goods.”
While the London insurance market’s Joint War Committee has so far kept its current list of high-risk areas unchanged, it has acknowledged that the situation remains under active review. Insurers are on alert for signs of further escalation that might necessitate reclassification.
At Allianz, the strategy is designed to be stable rather than speculative. “We’re not in the business of profiteering from conflict. Our model is built on long-term client relationships,” Khanna said. “We bundle war risk into broader cargo policies and rely on continuous risk assessment to make sure our clients are prepared.”
Recent collisions in the region have highlighted another growing concern: the rise of the so-called “shadow fleet” - vessels operating with unclear ownership, dubious flags, or no valid insurance. In one incident near Khor Fakkan, a collision between a legitimate tanker and a suspected shadow vessel led to significant damage and raised questions about cleanup liability.
With more than 50 such shadow fleet incidents recorded in recent months, underwriters are grappling with how to assess and manage this grey zone of exposure. Many of these ships bypass safety standards and are effectively uninsurable, yet they continue to transit high-risk waters.
“These kinds of cases really complicate things,” said Khanna. “It’s hard to assign responsibility when there’s no proper cover in place.”
Although marine insurers are on high alert, the reverberations are being felt well beyond their sector. “Energy insurance is already being triggered by refinery attacks. In cyber, proving causality is harder, but the exposure is real,” Khanna said.
The growing threat of digital interference is reshaping coverage considerations. “Spoofing and interference with navigation systems aren’t just military concerns. Commercial ships are vulnerable, and insurers must now factor that in.”
Building trust through expertise
At Allianz Commercial, advisory services are seen as integral to the offering. The firm’s global marine risk consulting team, comprising 22 specialists, works closely with clients operating in high-risk areas.
“We advise not just on coverage, but on storage strategies, route planning, and exposure management,” Khanna said. “We speak the same language as our clients - not just financial, but operational.”
That operational insight, he argued, enables more informed support. “Because we work with multiple clients in similar sectors, we can share insights across the industry. It’s about helping everyone prepare, not just react.”
Even amid geopolitical uncertainty, insurers are adjusting to a wave of emerging risks beyond traditional conflict zones. Lithium-ion battery fires, for instance, are reshaping risk profiles in cargo transport and logistics.
“Technical excellence is key,” said Khanna. “Clients need insurers who understand the details, not just the numbers.”
Marine insurance has long been defined by its capacity to withstand disruption. But with new threats mounting - from spoofing to uninsured fleets - insurers are being called on to do more than provide cover. They must help clients anticipate and adapt.
“Marine insurance has been around since the 1500s,” Khanna added. “Its resilience is unmatched. The goal is to stay nimble, stay informed, and stay ahead.”
