Full Capacity: Weighing anchor is easier said than done

June 27 2026 by

Welcome to Full Capacity, a weekly briefing on all the most important developments of the past week with a personal take on the news from our editor-in-chief, Mithun Varkey, delivered to your inbox every Saturday.   

More capacity. Lloyd’s has launched a new marine war risk consortium led by Chubb to boost coverage for vessels and cargo transiting the Strait of Hormuz.

The facility will issue primary policies and provide up to US$200 million each for hull and P&I risks, alongside an additional US$200 million in dedicated cargo capacity. 

Fronting deal. Lloyd’s has named ICICI Lombard as its local partner in India for multinational programs. Under the agreement, ICICI Lombard will issue local policies on behalf of Lloyd’s managing agents for selected business lines. 

M&A spotlight. Australian broker PSC Insurance Brokers has acquired MA Insurance Brokers, a specialist in transport and logistics. The combined entity will operate as PSC Transport Insurance Brokers, led by MA’s directors Barry Mathison and Mariann Illyes. 

Far from clear. Geopolitical tensions and the prolonged closure of the Strait of Hormuz have left over 1,150 vessels and US$125 billion of cargo stranded, which Allianz Commercial says signals a transition toward a “new maritime order”. The scale of the disruption means that despite the peace deal, it will be many months before the flow of trade normalises. 

1.7 update. It should be no surprise that the July 1 renewals are tracking in line with the softening trend, however, there is a growing view from reinsurers that pricing is bottoming out. 

What is even more interesting about the Australian renewals is the impact consolidation is having on reinsurance demand.  

Aon’s John Carroll says the broker estimates “up to 10% of the total market catastrophe limit may be removed following the M&A activity”. 

A fragile calm

After about four months of tensions in the Strait of Hormuz and multiple false starts, there is hope for a resolution after the US and Iran agreed on a roadmap towards a final deal, which sets out a 60-day period for negotiations on measures to end the war and on Tehran’s nuclear programme. 

Yet, the path forward remains uncertain.  

Talks are ongoing, rhetoric on all sides remains volatile, and any breakthrough is far from assured.  

Markets offer a partial signal of cautious optimism: Brent crude has eased from conflict-driven highs, briefly dipping below US$72.5 a barrel before stabilising above US$73. But oil price movements alone are an imperfect proxy for stability on the water. 

The insurance market, for its part, is taking a disciplined stance.  

Underwriters continue to adopt a wait-and-see approach, holding firm on war risk pricing until there is clear evidence of sustained and safe transit through the strait. A temporary lull is not enough to justify a recalibration of risk. 

That caution is well-founded.  

The operating environment remains fragile, underscored by sporadic attacks.  

On Thursday, Iran’s Revolutionary Guards attacked a Singapore-flagged vessel with drones, highlighting how quickly conditions can deteriorate.  

The strike has also forced the temporary pause of evacuation efforts led by the International Maritime Organization.  

At the same time, an alternative transit route proposed by Oman has been rejected by Tehran, further complicating coordinated responses. 

Even in the most optimistic scenario – a formal agreement and a reopening of the strait – the return to normal shipping conditions will be anything but immediate.  

For the more than 1,000 vessels stranded in the Persian Gulf, resumption is not simply a matter of access, but of readiness. 

Prolonged disruption has created a backlog of operational risks.  

Many vessels have missed mandatory surveys and inspections as classification society surveyors have been unable to board.  

Months of idling in have also taken a physical toll: hull fouling from marine growth is likely to reduce fuel efficiency, while engines, boilers, and auxiliary systems may require extensive maintenance before vessels are deemed seaworthy. 

Compounding these challenges is the ongoing threat environment. Mine-clearing operations led by US and allied forces are still underway, meaning transit risk will persist even after routes are formally reopened.  

For shipowners, insurers, and regulators alike, this creates a layered risk landscape where clearance does not equate to safety. 

In that sense, the real test is not whether the strait reopens, but how quickly – and safely – global shipping can adapt to what may be a fundamentally altered operating environment. 

People moves

In notable senior management changes in the region, Liberty announced that its APAC CUO Michael Abdallah will retire on September 30 after 27 years with the company and he will be succeeded by Marcus Thomas. 

Howden Re has bolstered its China team hiring three managing directors –  Houqin Zhu as head of China treaty, Mike Xin as head of agriculture for Asia Pacific and David Song as head of retrocession for greater China. 

Gallagher Re has named Minesh Jani as CEO for India, confirming an exclusive report by IAN in February. 

QBE has appointed Callum O’Brien as head of P&I for Asia. 

Do check out our weekly people move round-up to stay up to speed on the most important appointments in the region.

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