Lloyd's of London has affirmed it will continue insuring vessels in the Gulf despite soaring prices and heightened risks. Patrick Davison, Lloyd's head of underwriting, stated the market remains open to providing coverage to any shipowner who requests it, pushing back against criticism that insurers are abandoning the region. Insurance costs for ships transiting the Strait of Hormuz have jumped 12-fold as Tehran threatens vessels.

The US government has proposed a $20 billion reinsurance facility through the Development Finance Corporation to restart maritime commerce through the Gulf. However, Lloyd's leadership argues the slowdown stems from safety concerns rather than insurance availability. UK Chancellor Rachel Reeves met with Lloyd's chair Sir Charles Roxburgh, reportedly agreeing that the core issue is de-escalating the conflict to protect crews rather than fixing insurance coverage.

Some market insiders suggest the US proposal could actually benefit Lloyd's by providing taxpayer-funded subsidies that insurers might pass along to shipowners if shipping resumes. Questions remain about whether Lloyd's could insure large convoys of oil tankers, particularly those escorted by US military forces. One industry figure noted this scenario hasn't been tested and that the DFC backing might help secure such coverage. Meanwhile, Brent crude prices surged to nearly $120 per barrel before retreating, underscoring the economic stakes of the maritime standoff.