Iran War: The Insurance Bill Goes Far Beyond Tankers

The Iran conflict is creating direct losses in marine and specialty insurance, but its broader impact may come through renewed claims-cost inflation. Swiss Re expects property rebuilding costs to rise about 7% in the U.S. and 11% in Germany by 2027 as second-round inflation spreads. Marine war insurance is a rare, hard market, with sharply higher pricing creating opportunities for specialty carriers able to deploy capacity without excessive legacy losses. Auto and property insurers face higher repair and rebuilding costs just as pricing is softening, making existing underwriting margins increasingly important. Higher-for-longer interest rates provide a partial offset through reinvestment yields but cannot compensate indefinitely for weak underwriting discipline. The U.S. commercial P&C hard market is ending. Commercial property premiums were down 6.3%, large accounts were down 3.7%, and insurers were increasingly competing.