Lloyd’s estimates $1.9B in losses from US-Iran war

Lloyd's of London on Thursday published its first estimate of losses from the US-Iran conflict, putting the figure at approximately £1.4 billion ($1.9 billion) — a measure of the financial toll exacted by six months of hostilities in the Persian Gulf.bloomberg+1

The insurance marketplace reported pretax profit of £3.5 billion for the first half of 2026, a 17% decline from £4.2 billion in the same period a year earlier. Gross written premium rose 6.9% to £34.7 billion, and the combined ratio improved to 90.8%, but investment returns were halved to £1.8 billion as geopolitical tensions drove widening bond yields.lloyds+1

A Market Under Strain

The losses are concentrated in hull war, cargo, and energy lines, according to Insurance Business, which reported that marine insurers across the London market have collectively faced estimated claims of between $1.5 billion and $2 billion as of late August, with projections that total losses could reach $3 billion. At least 14 to 17 seafarers have been killed in the conflict as of mid-2026.cryptobriefing

The crisis traces to late February, when US and Israeli airstrikes on Iranian positions prompted Tehran to blockade the Strait of Hormuz. Tanker traffic through the waterway collapsed by more than 80% even before the blockade was formally declared, as vessel owners judged the physical danger too great — regardless of the price of insurance.insurancebusinessmag+1

Washington's $40 Billion Fix That Fixed Nothing

The losses at Lloyd's stand in sharp contrast to the record of the US government's own intervention. The US Development Finance Corporation unveiled a $40 billion maritime reinsurance facility in the spring, backed by Chubb ↘ 1.91%, AIG American International Group, Inc. ↘ 0.85%, Berkshire Hathaway ↘ 0.41%, Travelers The Travelers Companies, Inc. ↘ 1.33%, Liberty Mutual, and Starr. The program was designed to restore energy flows through the Strait of Hormuz.dfc+1

It has not insured a single voyage.insurancebusinessmag

Brokers and underwriters told Insurance Business the program was built on a misdiagnosis: Washington treated the shipping shutdown as an insurance-availability problem, when capacity had in fact remained available throughout — just repriced steeply upward. Shipowners were not struggling to find cover; they were refusing to sail.insurancebusinessmag

Outlook

Lloyd's Chief Executive Patrick Tiernan struck a measured tone, noting that "performance and high risk are far from mutually exclusive" and that "underwriting discipline and innovation are the keys to maintaining outperformance". The market said it remains on track to deliver its full-year guidance, though the underlying combined ratio edged up to 84.0% as risk-adjusted rates declined in a more competitive pricing environment.lloyds