Lloyd’s of London will insure ‘basically anyone’ in Gulf: FT

London’s marine insurance market has expanded high-risk zones in the Gulf amid escalating Middle East tensions, with Lloyd’s of London playing a central role in stabilizing maritime trade through partnerships and risk management adjustments. The Joint War Committee (JWC), representing Lloyd’s Market Association and London insurers, added waters around Bahrain, Djibouti, Kuwait, Oman, and Qatar to high-risk designations, reflecting heightened concerns over war-related perils. This expansion aims to close coverage gaps, ensuring vessels operating in the region are adequately insured as premiums for Gulf war risk coverage have surged fivefold in recent days.

Simultaneously, Lloyd’s is collaborating with the U.S. International Development Finance Corporation (DFC) to develop political risk insurance and financial guarantees for Gulf shipping, addressing security risks in one of the world’s critical energy corridors. Approximately 1,000 vessels, with a combined hull value exceeding $25 billion, remain in Gulf waters, half of which are oil and gas tankers. Lloyd’s Market Association CEO Sheila Cameron emphasized that most of these vessels are insured through the London market, with coverage remaining active despite geopolitical volatility.

The U.S. government has also signaled support for maritime stability, including potential naval escorts for tankers through the Strait of Hormuz and DFC-backed guarantees. These measures aim to reassure insurers and shipping operators while maintaining energy supply chains. Lloyd’s spokesperson highlighted the market’s commitment to leading global war risk insurance, underscoring its role in balancing risk assessments and supporting trade continuity amid regional conflicts.

For investors, the interplay of private insurance capacity and public financial tools underscores the Gulf’s strategic importance and the financial sector’s role in mitigating geopolitical disruptions.