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Kia ora,
Insurance is a fickle beast. It can change its mind quickly when things start to feel dangerous, whether that danger is close to home or unfolding overseas.
There is a lot happening in the world right now, and with all the media noise, much of it feels unsettling. You may have found yourself wondering whether growing global tensions will affect your insurance. The short answer is that for most people, it will not.
What insurers are really watching is whether this remains a localised issue, mainly affecting war related risks in specific regions, or whether it becomes something broader that starts to impact insurers’ financial strength and "appetite for risk" more generally.
Let’s start with something positive.
Gold prices are climbing, and many people are having their jewellery revalued as a result. Those valuations are often coming back much higher than before. If you own a meaningful amount of jewellery, it is worth checking whether your insurance still reflects its true value. Under insurance has a habit of showing up at exactly the wrong time.
Now for the less cheerful part.
We are already seeing impacts in parts of the insurance market most exposed to conflict zones. Shipping insurers are cancelling war risk cover for vessels travelling through high risk areas, with premiums rising sharply. After Iran’s Revolutionary Guard declared the Strait of Hormuz closed, some marine insurers activated 48 and 72 hour cancellation clauses, shifting the risk from higher costs to cover potentially being withdrawn altogether. Aviation and cyber insurance are also tightening, with higher rates and more cautious underwriting linked to regional instability.
Despite this, the global insurance industry is better equipped than ever to manage regional conflict. More diversified portfolios, stronger data and modelling, and clearer policy wording all help limit unexpected exposure. So while parts of the market have already hardened, any broader market wide shift will depend on how far the conflict spreads and how severe it becomes.
For now, for most everyday insurance holders, this is something to be aware of rather than something to be alarmed by.
Most personal insurance is not affected. If you are not directly connected to high-risk regions, your home, car, contents and everyday cover are unlikely to change.
Check high value items. Rising gold prices mean jewellery is often under insured. A fresh valuation can make a real difference at claim time.
Business and travel exposures matter more. If you are involved in shipping, aviation, international trade or cyber heavy operations, this is where insurers are tightening terms first.
Understand exclusions and cancellation clauses. War risk and cyber policies are being reviewed closely. Knowing what is not covered matters just as much as knowing what is.
Stay informed, not alarmed. The insurance industry is well prepared for regional shocks. A wider market shift would only occur if conflict escalates significantly.
I hope you have a great month ahead, and as always, if you need a hand with anything, we’re only ever a phone call or email away. We’re always happy to help, and we love hearing from you.
And give your dog a pat from us 🐾
Schedule an Appointment with Me
Joshua Rhind | General Manager
Caveo - powered by Velocity Financial
FSP637909
38 Vivian Street, Te Aro, Wellington
M: 027 384 6444
W: www.caveo.co.nz
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