War risk premiums on Israel-linked vessels have moved between 0.2% and 5% of hull value since 2023, and underwriters now charge Israeli, US and UK ships up to three times more than other flags. Here is who sets the rate and why.
War risk insurance for Israeli-linked shipping is set by the Joint War Committee (JWC) in London. This committee, composed of Lloyd's and company-market underwriters, designates high-risk sea zones and prices additional premiums on top of standard hull cover. Since the Houthi campaign began in late 2023, premiums for vessels transiting the Red Sea and Bab el-Mandeb have ranged from 0.2% to 5% of a ship's hull value. Israeli, US, and UK-linked vessels have sometimes paid up to three times more than unaffiliated ships.
Who sets war risk insurance prices for Israeli shipping?
The Joint War Committee (JWC) sets the framework for war risk insurance. It comprises underwriters from the Lloyd's market and the London company markets, but it does not directly insure ships. The JWC publishes a list of "Listed Areas," which are sea zones where standard hull policies do not apply, requiring shipowners to purchase an Additional Premium (AP) from a war risk underwriter.
The JWC's most recent boundary update, JWLA-034, was issued on July 29, 2026. This update covers hull war, piracy, and terrorism risk. Zone changes are published as JWLA circulars and become effective on the date stated in each notice, according to marine insurance tracking platform JWLA.ai.
How much more do Israeli-linked ships pay for war risk cover?
Ships with perceived American, British, or Israeli connections paid approximately three times more for Middle East war risk cover than unaffiliated vessels after the JWC expanded its Listed Areas in early March 2026, as reported by Lloyd's List. This expansion followed direct US and Israeli military actions against Iran. It added Bahrain, Djibouti, Kuwait, Oman, and Qatar to the high-risk list, joining the existing Red Sea and Gulf of Aden zones.
All shipowners transiting the region experienced a four- to five-fold increase in premiums at that time, according to marine insurance sources who spoke to Lloyd's List. This added cost amounted to millions of dollars per voyage for larger, higher-value vessels.
How have Red Sea premiums changed since Houthi attacks?
The additional war risk premium for a Red Sea transit ranged from 0.6% to 1.0% of a vessel's hull value in February 2024. Ascoma International general manager Claire Hamonic told AFP that the war premium had increased five to tenfold since the Houthi attacks began. Rates then eased to about 0.5% of hull value after a January 2025 Gaza ceasefire announcement.
Premiums moved back above 0.7% in February 2025 following renewed US airstrikes on Houthi positions, Reuters reported. By December 2025, after another Gaza ceasefire and a pause in Houthi attacks on shipping, the additional war risk premium for a Red Sea transit fell to around 0.2% of hull value. This was the lowest level since November 2023, according to Marsh global head of marine Marcus Baker, who spoke to S&P Global Commodity Insights.
Premiums for vessels crossing Bab el-Mandeb specifically stood at 0.5% of hull value as of July 2026. This contrasts with 0.1% for ships routing further north near western Saudi Arabia toward the Suez Canal, based on Marsh data cited by Al Jazeera.
Why do premiums remain high even after attacks stop?
Premiums often rise quickly after an incident but decline slowly, according to a Kpler analysis cited by the Irregular Warfare Initiative. Kpler's analysts concluded that rates normalize only after a sustained period of incident-free transits. This period rebuilds the actuarial confidence underwriters need to lower a quoted rate.
Munich Re risk expert Silke Krummaker told Al Jazeera in July 2026 that insurance premiums are often not the largest cost for shipping lines during route instability. Reduced vessel availability, longer voyages, delays, and higher fuel costs from rerouting can outweigh the premium itself.
What happened to premiums during the 2026 Hormuz escalation?
War risk premiums surged fivefold within 48 hours of coordinated US and Israeli airstrikes on Iran on February 28, 2026, as reported by the Irregular Warfare Initiative. Some major marine insurers canceled existing coverage entirely. They then offered replacement policies at approximately sixty times the pre-crisis rate.
The JWC redesignated the entire Arabian Gulf as a conflict zone during the same period, leading to an over 80% decrease in tanker traffic through the strait. Political violence and terrorism coverage for Middle East energy assets was quoted at up to 10% of the rate on line by late March 2026, Howden Re reported. This reflected a sharp tightening of available capacity. Howden Re's analysis identified between nine and fifteen tankers that had sustained damage since the conflict began.
How would the ZIM-Hapag-Lloyd deal affect Israel's insurable fleet?
ZIM Integrated Shipping Services, the Haifa-founded carrier providing Israel's national shipping capacity since 1945, agreed on February 16, 2026 to be acquired by Germany's Hapag-Lloyd in a $4.2 billion transaction. The deal would create a separate Israeli company called New ZIM, owned by private equity firm FIMI Opportunity Funds, holding 16 vessels to preserve Israel's direct global shipping access, according to ZIM's transaction announcement.
The transaction remains unresolved as of September 2026. Israel's Shipping and Ports Authority and Defense Ministry have formally opposed the deal on national security grounds, and a government review meeting was rescheduled to September 9, 2026, according to Ynetnews and Container News. ZIM shares have traded well below Hapag-Lloyd's $35 offer price, a gap that market analysts read as pricing in real doubt the deal closes, per 24/7 Wall St. If the deal is blocked, ZIM's insurable fleet would most likely remain under its current independent ownership rather than splitting between Hapag-Lloyd and New ZIM.
What should Israeli shippers track for next year's premiums?
Three trackable signals will determine the direction of Israeli shipping premiums. First, shippers should monitor the pace of further JWLA boundary amendments from the Joint War Committee, published as dated circulars for zone changes. Second, the outcome of Israel's September 2026 review of the ZIM-Hapag-Lloyd transaction, since approval, rejection, or a revised structure would each reset which vessels underwriters categorize as Israeli-linked risk differently.
Third, the length of any incident-free period in the Red Sea and the Strait of Hormuz is crucial. Kpler's research indicates that sustained duration of calm, not merely the absence of a single attack, is what genuinely influences a quoted rate. Shippers should monitor these factors to anticipate changes in their insurance costs.