Increases in war risk insurance premiums, marine insurance costs and freight rates due to US-Iran conflict

Written Reply to Parliamentary Question

Ms Hazlina Abdul Halim asked the Minister for Transport

a.          whether the Government has latest data on increases in (i) war risk insurance premiums, (ii) marine insurance costs and (iii) freight rates arising from the US-Iran war and disruptions in the Strait of Hormuz, including the extent of freight rate and surcharge increases; and

b.           if so, how these cost pressures are assessed to impact Singapore's competitiveness as a global maritime and trading hub.

Reply by Minister for Transport Jeffrey Siow:

1.          Across the international maritime industry, war risk insurance premiums and freight rates have increased alongside the increased risk of operating in the Persian Gulf.

2.          Based on industry estimates as of July 2026, war risk cover for transits through the Strait of Hormuz had increased to 3.5%-7.5% of hull and machinery value per transit, from 0.10%-0.25% pre-conflict. Container freight rates for the Asia-North Europe trade lane had risen by about 120% compared to rates before the conflict, though they remain around 40% below the highest peak observed during the Red Sea shipping disruption in 2024.

3.          For Singapore-based shipowners and operators, standard marine insurance cover remains stable. Shipments to and from Singapore have also been less affected compared to those to and from the Middle East, where shipping lines have imposed additional surcharges.

4.          The increases in freight rates and marine insurance costs are not unique to Singapore. The Singapore maritime ecosystem remains competitive. Our value proposition as a maritime and trading hub lies in our stability, strong connectivity, and comprehensive ecosystem.