By Tim Wills, head of marine – Australia, Markel

Geopolitical instability has brought marine war risk back into sharper focus, but the conversation continues to evolve. Marine war risk is becoming increasingly complex, with exposures extending well beyond physical damage and requiring a broader understanding of how conflict, regulation and global trade intersect. 

For brokers, insurers and insureds, the challenge is no longer simply assessing the likelihood of a vessel or cargo being affected by conflict, it's understanding the potential wider operational, financial and regulatory consequences that can emerge when global events disrupt the movement of goods. 

Recent years have demonstrated just how quickly disruption can ripple through global supply chains, whether triggered by conflict, geopolitical tension or a pandemic. Conflict can increase fuel costs, disrupt shipping routes and place additional strain on freight networks, creating significant challenges for businesses engaged in international trade.

Looking beyond physical damage 

For many clients, physical damage tends to dominate the conversation around marine war risk. In practice, it is often the less visible exposures that create the greatest disruption. 

Consider a vessel held at a port outside a conflict zone while the shipowners weigh up whether to transit a high-risk chokepoint. The vessel may be undamaged, but the consequences are mounting: delayed cargo delivery, additional crew costs, supply chain disruption and growing pressure on business continuity. What begins as a logistical challenge can quickly become a significant operational and financial issue. Uncertainty around the safe and timely movement of goods can not only undermine confidence across an entire supply chain but may also significantly increase the cost of carriage and/or severely limit the capacity and availability of services. 

War-related losses increasingly arise not from physical cargo damage, but from shipping companies using contractual rights to change routes, discharge cargo elsewhere, delay journeys or pass on additional forwarding costs. 

Businesses are often required to make decisions before the full picture has emerged. Rapid reporting cycles, evolving intelligence and shifting circumstances can create uncertainty at precisely the moment when clear judgement is needed most. 

There is also a human dimension. Prolonged disruption can make crew rotation and repatriation difficult, leaving seafarers onboard for extended periods with no clear timetable for relief. The welfare implications can be considerable and often sit alongside the commercial consequences of disruption. 

Where the real cost often lies 

• Forwarding and rerouting expenses when carriers exercise their rights to avoid conflict zones and terminate a voyage before the intended destination, leaving cargo to be moved on at additional cost.
• Delay costs from port congestion, route diversions, inspections and security measures.
• Detention and port holding expenses where vessels or cargo are held up by sanctions reviews, security concerns or regulatory intervention.
• Additional freight and logistics costs from reduced capacity and longer routes, for example rerouting around the Cape of Good Hope.
• Sanctions and compliance costs of keeping transactions, payments and cargo movements compliant with changing requirements.
• Supply chain disruption costs affecting the movement of goods, inventory management and business continuity. 

When operational issues become regulatory issues 

Exposures are not always defined by what happens on the water. Permissions, approvals, contractual obligations and sanctions considerations can all come into play. As geopolitical tensions evolve, businesses can find themselves managing legal, operational and reputational considerations simultaneously. 

Recent developments illustrate how quickly the environment can shift. In July, the Lloyd’s Market Association published a new model clause addressing payments made for vessels to transit the Strait of Hormuz, reflecting the growing intersection of sanctions, regulation and routine voyage decisions. In simple terms, the clause makes clear that insurers will not cover those payments and that cover for the relevant vessel may cease if such a payment is made, because of the potential sanctions and terrorism-law implications.  

It is a clear example of how operational challenges can quickly become regulatory challenges, with a routing decision, port call or payment instruction carrying consequences beyond the voyage itself.  

Marine war risk was traditionally viewed through the lens of state-on-state conflict. Today, the landscape is often more complex, involving a wider range of actors, competing geopolitical interests and tactics that can blur traditional definitions of conflict. From the perspective of businesses and their advisers, this can make risk assessment more complicated and layered. Emerging technologies also add complexity. The objective is not to predict every new threat, but to understand how geopolitical and technological developments may influence exposures over time. 

Why experience matters 

In marine war insurance, experience is more than a differentiator, it is a risk management tool. When events move quickly, it is depth of knowledge that allows a considered response rather than a reactive one.  

That knowledge is rarely built on a single event or market. It accumulates across regions and cycles of disruption, drawing on real-time geopolitical intelligence and longstanding relationships. The value lies in the ability to read an emerging situation quickly and help clients make informed decisions while circumstances are still shifting.  

Experience also supports consistency. Periods of uncertainty can trigger sharp swings in market sentiment, underwriting appetite and pricing. For brokers and insureds, confidence tends to come from working with partners who take a disciplined, long-term view and hold their nerve when conditions change. 

For brokers and risk advisers, the key takeaway is that resilience planning deserves increased attention. 

In fast-moving situations, businesses are often faced with conflicting information about whether a route is open, restricted or effectively closed. Cutting through that noise is difficult in isolation. This is where partnership matters: insurers, brokers and clients sharing intelligence and insight builds a clearer, more comprehensive picture than any party could form alone.  

Marine war insurance is no longer solely about responding when something goes wrong. Increasingly, it is about helping businesses navigate uncertainty, understand interconnected risks and make informed decisions in an environment where geopolitical developments can have far-reaching consequences.