Singapore aviation insurance costs rise as Iran conflict escalates

Local insurers and reinsurers must now manage increased risks related to hull war, passenger liability, and third-party claims.

Thompson further said that whilst a fractured global landscape was the top predicted risk for 2026, the speed at which this crisis became acute was unexpected. 

He anticipates the situation will expedite a “hardening” of the market, characterised by reduced capacity and more restrictive policy language.

For the broader market, the disruption at Changi Airport—a key gateway between the Asia-Pacific and Europe—introduces operational complexities, including airspace closures and mandatory rerouting. 

Whilst most standard consumer travel policies exclude direct acts of war, the industry is preparing for an inevitable surge in passenger and cargo delay claims, alongside business interruption filings from operators.

The long-term impact on the Singapore market will largely depend on the duration of the conflict and the continued availability of international reinsurance. 

If global reinsurers increase their pricing due to heightened geopolitical risk, these costs will likely be passed down to local primary insurers during upcoming renewals. 

This shift would test the resilience of both insurance providers and the companies they cover.