More Iran War fallout: Maritime insurance industry shifts from London to China

Bullets:

China and Hong Kong comprise the most valuable fleets of commercial ships in the world, and the largest numbers of bulk carriers, container ships, and tankers.

Japan, Korea, and Singapore also have huge investments in global shipping.

But European and American insurance brokers underwrite 90% of maritime insurance in the world, and on the first day of the war against Iran canceled insurance coverage on vessels already in contested waters.

Hong Kong now writes insurance coverage for ships from Mainland China and Hong Kong, even those transiting the Persian Gulf. What's more, Iranian authorities are clearing China-flagged vessels to pass safely.

Report:

Good morning.

China and the other Global Majority countries have set up a new financial system, outside the US dollar and outside Western banks. It’s a gradual process, but it is accelerating, and it’s in that context we should consider news stories like this one here.

Hong Kong is the financial center in this new system, and has a lot of advantages that we have shared before. And there, insurance companies in Hong Kong are stepping in to write cargo insurance for ships in the Persian Gulf. A group of five Hong Kong insurers are underwriting coverage for 10 Mainland China ships transiting war zones there. Hong Kong has the capacity to take on that risk, and it’s important for Hong Kong to do so, otherwise Chinese ships have no choice but to go through very high-priced companies in London, or forego insurance coverage completely.

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In the opening days of the war, the biggest shipping insurance companies in Europe and North America pulled coverage on ships going into or out of the Persian Gulf. Insurance coverage “automatically terminates” if a ship enters the Gulf. Those insurance collectives cover 90% of the world’s shipping fleets.

They still offer “standard protection”, but that goes away inside war zones. So ships who do hope to make that run are seeing huge spikes in insurance premiums.

China is in a unique spot, though. Iran is allowing Chinese ships to pass through the Strait of Hormuz. And Hong Kong is stepping up to write insurance on Chinese ships at a far lower cost than what is on offer from insurance brokers in London.

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This is a table of the top shipowner countries, ranked by value. In 2024, China was in second place, just behind Japan, with a market value of $204 billion. Sector by sector, and ship by ship, these are assets that need maritime insurance before they go anywhere.

China’s fleet is the largest in the world, and in “bulk cargoes” has the world’s largest total asset value. China also has the world’s biggest fleet of tankers and container ships. Hong Kong is the 10^th largest by insurable value, at $45 billion. So we need to emphasize this part, again. Hong Kong companies are writing insurance coverage for shipowners in Hong Kong and Mainland China.

Consider then that Chinese ships can pass through a hot war zone, and get insurance, while most of the ships from other countries can neither clearance to sail past in the first place, nor the insurance to even try. It’s a seismic geopolitical shift, and it’s clear from how global insurance companies are pricing the risk to ships that are not flying flags from China or Hong Kong.

Be Good.

Resources and links:

Top 10 shipowner countries/regions in the world
https://vesselslink.com/blogs/news/top-10-shipowner-countries-regions-in-the-world

Hong Kong marine insurers gain edge over London with cheaper war-risk cover for Chinese ships
https://www.scmp.com/business/banking-finance/article/3346118/hong-kong-marine-insurers-gain-edge-over-london-cheaper-war-risk-cover

Insurance Clubs to Halt Ship War-Risk Cover in Persian Gulf
https://www.claimsjournal.com/news/national/2026/03/02/336002.htm

Insurance Clubs to Halt Ship War-Risk Cover in Persian Gulf
https://www.bloomberg.com/news/articles/2026-03-02/major-insurance-clubs-to-end-ship-war-risk-cover-in-persian-gulf

Traffic is trickling through Strait of Hormuz: Who’s moving and who’s stranded
https://www.cnbc.com/2026/03/18/hormuz-bottleneck-vessel-tanker-tracker-shipping-strait-of-hormuz.html