Five weeks into the Iran war, most investors are watching oil charts and defense stocks. Almost nobody is talking about insurance companies. That is a mistake. The $3 trillion private insurance industry sits directly in the blast radius of this conflict — exposed through marine war risk, energy infrastructure claims, and the single biggest shipping disruption in modern history. Some insurers are bleeding. Others are printing money. Knowing which is which separates the intelligent investor from the crowd.
I spent the last week pulling apart the financials, war risk exposure, and premium dynamics of the top-tier insurance companies to answer one question: is this sector a buy, a sell, or something more nuanced? The answer, as it usually is with insurance, depends entirely on which side of the underwriting ledger you are looking at.
The Strait of Hormuz Changed Everything for Insurers
The insurance story starts with a chokepoint. Roughly 15 million barrels of oil pass through the Strait of Hormuz every day, along with another 5 million barrels of refined products. When Iran effectively closed the Strait to commercial traffic in early March, it did not just disrupt oil markets. It detonated the marine insurance market.
Within 72 hours of hostilities, major marine war risk providers cancelled coverage for vessels operating in the Persian Gulf. Al Jazeera reported that the insurance withdrawal was “doing the work that physical blockade has not” — ships were not stopped by missiles but by the absence of coverage that would make sailing financially viable. Leading P&I clubs including Gard, Skuld, NorthStandard, and the London P&I Club all issued coordinated cancellation notices.
The numbers are jarring. Benchmark freight rates for Very Large Crude Carriers hit an all-time high of $423,736 per day — a 94% spike. Veson Nautical data shows roughly one in five of the world’s offshore vessels are now stranded in the Gulf region: 1,440 offshore supply vessels, 432 offshore construction vessels, and 156 jack-up rigs. That is 19%, 18%, and 27% of their respective global fleets sitting idle because the insurance math no longer works.
For insurance companies, this is simultaneously a crisis and an opportunity. The crisis is accumulation risk — the possibility that a single military event could trigger claims across property, marine, aviation, and business interruption policies simultaneously. The opportunity is that war risk premiums have exploded from 0.2% to over 1% of vessel value per voyage, and every ship that eventually transits the Strait will need coverage at these elevated prices.
Chubb: The Government’s Chosen Insurer
If one company has emerged as the clear winner from this crisis, it is Chubb Limited (CB). In mid-March, CNBC reported that Chubb was selected as lead underwriter for a $20 billion U.S. government-backed shipping insurance program, working with the U.S. International Development Finance Corporation to get oil tankers moving through the Strait again.
CEO Evan Greenberg called the Strait of Hormuz commerce “vital to the global economy.” That is corporate understatement. What Chubb actually secured is a government reinsurance backstop that lets it write war risk policies with the U.S. Treasury effectively absorbing the catastrophic tail risk. Chubb collects premiums on every covered vessel. The DFC covers the downside if something goes catastrophically wrong. That is about as good as an insurance deal gets.
The financials back up the thesis. Chubb generated $59.6 billion in revenue in 2025 with a 17.3% profit margin and return on equity of 14.3%. Its combined ratio sits between 81% and 86%, meaning Chubb keeps 15 to 19 cents of pure underwriting profit on every dollar of premium — dramatically better than the industry average of 96%. The stock trades at $323 against a consensus target of $338, with Citigroup’s high target at $385.
One detail most analysts are overlooking: Warren Buffett’s Berkshire Hathaway holds roughly 34.2 million shares of Chubb, worth approximately $11 billion. When the world’s most famous insurance investor is already positioned in a stock that just landed the most consequential government insurance contract of the decade, that tells you something about how the smart money was thinking before the war even started.
Berkshire Hathaway: The Float Fortress
Berkshire Hathaway (BRK.B) does not get the war risk headlines, but it may be the most defensively positioned insurance conglomerate on the planet right now. The company ended 2025 with $176 billion in insurance float and $373 billion in cash, Treasury bills, and equivalents. Greg Abel took over as CEO at the start of 2026, with Buffett remaining as chairman.
Insurance float is the money policyholders pay in premiums that Berkshire holds before claims are paid out. In a rising-rate, high-volatility environment like the current one, float becomes more valuable because it can be invested at higher yields while premium income grows from hardening markets. Buffett himself has called insurance “the most important business at Berkshire” and the “engine” driving its success since 1967.
The stock has pulled back over seven consecutive sessions, partly due to weaker Q4 2025 insurance underwriting results. But those results reflected tough year-over-year comparisons rather than structural deterioration. With $373 billion in dry powder and rates hardening across commercial lines, Berkshire is positioned to deploy capital aggressively into the exact market conditions that historically generate outsized insurance returns. Abel resumed buybacks on March 4 and committed his entire after-tax salary to purchasing Berkshire stock — a signal that management sees current prices as attractive.
Travelers, AIG, and the Domestic Premium Machine
Not every insurance investment thesis requires direct war risk exposure. Travelers Companies (TRV) and AIG both benefit from a secondary effect of the conflict that is arguably more durable than war risk premiums: broad commercial rate hardening driven by inflation and heightened uncertainty.
Travelers reports Q1 2026 earnings on April 16, with analysts expecting $11.1 billion in revenue. The company has hiked commercial rates steadily, and its revenue has compounded at 8.8% annually over five years. It has raised dividends for 21 consecutive years. Zacks rates it a Strong Buy. For investors who want insurance exposure without the geopolitical complexity of marine war risk, Travelers offers a clean domestic play on premium growth and disciplined underwriting.
AIG’s story is a turnaround entering its next phase. CEO Peter Zaffino called 2025 “an exceptional year” — adjusted EPS grew 43% to $7.09, core operating ROE hit 11.1%, and North America Commercial Lines delivered 14% net premium written growth with a combined ratio of 84.3%. AIG is targeting 20%-plus EPS growth over the next three years and progressing toward a sub-30% expense ratio. The stock trades at a discount to Chubb and Travelers on most metrics, which makes it interesting for value-oriented investors willing to bet on continued execution.
The Losers: Where Insurance Exposure Becomes a Liability
Not every insurer benefits from a war. Companies with concentrated exposure to marine hull and cargo, aviation war risk, or Middle Eastern energy infrastructure face legitimate earnings risk. The P&I clubs that cancelled Gulf coverage did so precisely because the potential claims from a single missile strike on a loaded VLCC could exceed a billion dollars when hull, cargo, environmental cleanup, and business interruption are combined.
Morningstar DBRS noted that the main credit risk for insurers is “how losses accumulate across multiple insurance lines rather than sharp increases in attack frequency.” A single incident could trigger claims in property, marine, aviation, and business interruption simultaneously. Distinguishing between terrorism, sabotage, cyber incidents, and acts of war becomes harder in a live conflict zone, increasing coverage disputes and legal costs.
Specialty insurers with outsized Lloyd’s of London syndicates focused on marine and energy should be approached with caution until the conflict resolves. The potential payout on stranded vessels and damaged infrastructure is significant, and some of these companies lack the diversification and capitalization to absorb large-scale claims without material earnings impact.
The Private Credit Connection: Why Powell’s Warning Matters for Insurers
There is an underappreciated link between the insurance sector and the private credit stress that Fed Chair Powell flagged at Harvard today. Major insurers — particularly life insurance companies and large P&C players — have been significant allocators to private credit funds over the past five years, seeking higher yields than public fixed income could offer.
With the U.S. Private Credit Default Rate hitting 5.8% and funds like Ares, Apollo, and Blackstone’s BCRED capping redemptions, any insurer holding meaningful private credit allocations faces mark-to-market risk on their investment portfolios. This is a second-order risk that most insurance stock analysts are not yet incorporating into their models. When BDCs file semiannual reports on June 30 and mark holdings to fair value, insurers with concentrated private credit exposure could face write-downs that compress book value.
The insurers least exposed to this risk are those with conservative investment portfolios anchored in Treasuries and investment-grade corporate bonds. Berkshire Hathaway’s $373 billion cash position is the extreme example. Chubb’s investment portfolio, managed with characteristic conservatism, is another. Investors should ask one simple question of any insurance stock they are considering: what percentage of the investment portfolio sits in private credit or alternative assets? The answer matters more now than it has in years.
The Investment Framework: Buy, Hold, or Get Out
Here is how I am thinking about insurance stocks in the current environment, broken into three tiers:
Tier 1 — Buy on Strength: Chubb (CB) and Berkshire Hathaway (BRK.B). Both have fortress balance sheets, conservative investment portfolios, pricing power in hardening markets, and either direct benefit from the war risk premium cycle (Chubb) or the float and capital to exploit any dislocation (Berkshire). These are the companies you want to own through the conflict and beyond.
Tier 2 — Hold and Monitor: Travelers (TRV) and AIG. Strong domestic premium growth, improving combined ratios, and reasonable valuations. The Iran war is a tailwind for rate hardening but not a direct revenue driver. Watch Q1 earnings (Travelers April 16) for confirmation that premium momentum is accelerating. If combined ratios hold below 90%, these stocks work.
Tier 3 — Avoid Until Clarity: Specialty marine and energy insurers with concentrated Gulf exposure, Lloyd’s syndicates with outsized war risk books, and any insurer with significant private credit allocation in their investment portfolio. The potential claims from the Strait of Hormuz crisis and the private credit stress cycle represent fat-tail risks that are not adequately priced into these stocks.
What History Tells Us
Markets have historically posted gains during wartime. Both Gulf Wars saw double-digit equity increases within three to six months of onset, led by defense and energy. Insurance stocks followed a similar pattern — the initial shock of potential claims was overwhelmed by premium increases and rate hardening that persisted for years after the conflicts ended.
The 9/11 comparison is particularly relevant. Property-casualty insurers took massive claims in the immediate aftermath, but the subsequent hardening cycle from 2002 to 2005 produced some of the most profitable underwriting years in the industry’s history. Companies that survived the initial shock — and had the capital to write business at the new, higher rates — generated extraordinary returns.
The current setup rhymes with that pattern. Premium rates are rising across commercial, marine, and specialty lines. Insurers with strong capitalization are in position to write new business at prices that have not been available in years. And the companies that panic-sold coverage or exited markets entirely will not be there to compete when the cycle turns.
The Bottom Line
The Iran war has created a genuine fork in the road for insurance investors. Diversified, well-capitalized insurers with pricing discipline and conservative investment portfolios — Chubb, Berkshire, Travelers, AIG — are positioned to benefit from rate hardening, elevated war risk premiums, and flight-to-quality capital flows. Specialty players with concentrated Gulf exposure or heavy private credit allocations face real earnings risk.
Intelligent investors do not flee entire sectors because of headlines. They dissect the specific mechanics of how a crisis flows through a company’s income statement and balance sheet. In insurance, the crisis is the product. War creates risk. Risk creates premiums. Premiums, priced correctly and backed by sufficient capital, create profit. The companies that understand this — and have the financial strength to act on it — are where the opportunity lives.
This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consult a qualified financial advisor before making investment decisions.
Updated: March 30, 2026.