War Risk Premium Increase

Context

War risk insurance is a mandatory component of airline operating costs that covers hull loss and liability arising from conflict, hijacking, and related perils. Premiums are calculated per-flight based on the aircraft value, route risk classification, and prevailing threat assessment. The London insurance market, which underwrites the majority of global aviation war risk policies, has implemented successive rate increases since late 2023.

For routes transiting the Middle East, premiums have risen by between 50% and 500% depending on the specific airspace crossed and the insurer. The highest increases apply to routes overflying active conflict zones and regions with documented missile or drone activity. A single widebody round-trip on affected routes now carries a war risk surcharge of approximately $120,000 — a cost that was negligible prior to the current cycle of escalation.

Industry analysts and underwriters indicate this is not a temporary spike. The repricing reflects a structural reassessment of risk that is expected to persist for a minimum of 2-3 years. Several insurers have withdrawn from the market entirely for the highest-risk routes, reducing capacity and further driving up costs for remaining participants.

Key Data Points

Sources

• Lloyd's of London — Aviation war risk market reports, 2024-2026
• Willis Towers Watson — Aviation insurance market update, Q1 2026
• IATA — "Rising Insurance Costs and Their Impact on Air Transport Economics," 2025
• Insurance Insider — Aviation war risk premium tracking data, 2024-2026