GIC Re’s decision will impact general insurance companies in the public and private sectors in the field of ship hulls | Photo credit: REUTERS
This move by GIC Re, the largest reinsurer in India’s domestic reinsurance market, came after the US-Israeli military operation against Iran and the country retaliated by attacking several West Asian countries.
In a notice to insurance companies on March 1, the reinsurance company said it will stop covering maritime war risks for certain risk zones from 7pm IST on March 3. These areas include parts of the Persian or Arabian Gulf, the Gulf of Oman, Iran and all other sanctioned countries, certain areas of the Black Sea and the Sea of ​​Azov, waters connected to Russia, Ukraine and Belarus, as well as selected parts of the Red Sea, the Gulf of Aden and the Indian Ocean.
48 hours notice period
GIC Re’s decision will impact general insurance companies in the public and private sectors in the ship hull field.
“GIC had issued the 48-hour notice to the insurers on March 1, informing them about the cancellation of the excess. Accordingly, we have issued notices to all our customers (shipping companies) that they will no longer have the hull cover with effect from 7 pm on Tuesday,” a top official of a major general insurance company told. business line.
“Until the embargo is in place, a shipping company can seek under-hull coverage by paying additional premium if the company still needs to operate in these risk zones. This is optional,” the official said.
A reinsurers meeting is planned soon where all reinsurers are likely to decide on their action plans in the field of hull insurance. “Reinsurers are yet to make a decision on maritime freight and aviation wartime coverage. This will be notified soon,” the person quoted above said.
“Amid the heightened geopolitical risk in the Middle East, major shipping companies have already been hit. This is likely to result in a complete withdrawal of war risk cover. War cover for new risks would either not be available, but even if it were available, it would be extremely expensive. This could mean a significant increase in the cost of shipping,” said Hari Radhakrishnan, expert at the Insurance Brokers Association of India (IBAI).
“For aviation insurance, war risk cover will become expensive or unavailable to affected countries. The broader economic impact, such as inflation and supply chain disruptions, could also negatively impact claim costs,” Radhakrishnan added.
Amid the ongoing crisis in the Middle East and increased geopolitical tensions, reinsurance rates for covering war risks at sea are expected to increase significantly. The maximum reinsurance renewals in India occur in the month of April.
(With inputs from G Naga Sridhar, Hyderabad)
Published on March 2, 2026
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