The problem with the Strait of Hormuz now isn't just whether ships dare to sail, but also whether any insurance companies are willing to take on the risk. Chubb's latest statement is essentially sending a signal to the market: at least from an insurance perspective, there's beginning to be room for maneuver in partially resuming passage.
what happened
Reuters reported on March 20 that Chubb stated its marine insurance arrangements will be available for vessels transiting the Strait of Hormuz. This arrangement covers hull insurance, war liability insurance, and war cargo insurance. According to the report, Chubb will also be one of the lead partners in the U.S. International Development Finance Corporation's $20 billion Maritime Reinsurance Plan, aimed at helping commercial shipping gradually recover.
The significance of this is that war risk insurance is usually not included in ordinary insurance policies and must be purchased separately, and the premium increases significantly once the ship enters conflict waters. Without this type of protection, ship owners, cargo owners, and financiers are unwilling to take the risk.
What does this mean for the market?
In conclusion: This is a positive development, but it is not a signal that "Gulf shipping has returned to normal."
The reason is simple. The same Reuters report also mentioned that the current hostile situation has not eased, and there are no signs that ships can safely pass through the Hormuz. In other words, while the insurance threshold has begun to loosen, the real decision on whether a ship should sail still rests on safety, insurance premiums, the carrier's judgment, and the bargaining among the various parties.
Therefore, what is more likely to happen next is:
- Some shipowners or specific voyages have begun to tentatively resume operations.
- War risk premiums remain high.
- Gulf-related surcharges, quotation validity periods, and timeliness fluctuations remain in effect.
- The recovery process will be very uneven; you won't return to normal overnight.
The actual impact on cargo owners and foreign trade enterprises
If you have shipping business related to the Middle East, the Gulf, or the Red Sea, this news can be interpreted as "the market has a slight chance of recovery," but you cannot accept orders according to the logic of normal times.
Several real-world effects have not disappeared:
- Insurance costs are still high.
- Shipping schedules remain unstable
- The risks of temporary detours and cancellation of affiliation still exist.
- Short-term prices are still prone to change.
Especially for time-sensitive goods and goods with tight contract delivery dates, the biggest fear is that customers will see "insurance available" and assume the problem is solved. That's not the case.
What suggestions does CZL have?
A more prudent approach at this stage is:
- Shorten the validity period of quotes for the Gulf direction; don't lock in prices for too long.
- The quotation clearly explains the risks of war, emergency surcharges, and time-related fluctuations separately.
- For urgent shipments or shipments with very tight delivery deadlines, prioritize evaluating air freight or alternative transshipment options.
- For clients who already have business in the Middle East, communicating in advance that "being able to move" does not equate to "stable movement" is important.
If you want to see recent changes in surcharges, you can check directly. CZL Surcharge PageThe risk context in the Middle East can also be viewed in conjunction with our previous warning articles:Escalating attacks on the Strait of Hormuz raise maritime risks..
The core of this news
What's truly worth remembering isn't "Chubb made a move," but rather that insurance support has begun to emerge, indicating that the market is looking for ways to restore traffic flow; however, as long as the security situation remains unchanged, cost and time pressures won't disappear immediately.
For cargo owners, this is more like a signal of a transitional phase than a sign that the alarm is off.