War Risk Insurance in Food Trade: Strategic Response to Geopolitical Risks

In the current context of heightened geopolitical tensions and maritime threats, insurers should design specific coverages for strategic cargoes, such as food, medicine, and agricultural inputs, as part of their risk management framework. These coverages can include broader risks such as supply chain disruption, ship seizure, damage from military actions, and terrorist attacks.

However, according to international standards and insurance custom in Iran, war risks and terrorism are normally excluded from insurers’ obligations, unless they are explicitly and with careful assessment, added under special coverages and at an additional rate. In the recent 12-day war, even international insurers temporarily suspended war coverage for passage through the Strait of Hormuz; therefore, it is suggested that domestic insurance companies, through cooperation with reinsurance and precise adjustment of rates and conditions, design appropriate war insurance packages and provide them with explicit time and location restrictions.

Significant increase in insurance premiums for shipments of essential goods

In times of war all over the world, naturally, following the escalation of regional tensions and recent incidents, insurance premium rates for cargoes of essential goods, especially on maritime routes, have increased significantly. This increase is due to the addition of war risk modules, maritime insecurity and logistical sanctions, which increase the risk of insurers and reinsurers.