KUALA LUMPUR, May 6 — Cargo insurance costs for shipments passing through conflict-prone regions are rising as war-risk premiums climb, although base insurance rates remain largely stable, the General Insurance Association of Malaysia (PIAM) said.

PIAM chief executive officer Chua Kim Soon said marine cargo insurance consists of two components — standard cargo cover and a separate war-risk extension.

“Base cargo insurance rates remain broadly stable. It is the war-risk component that increases in areas of conflict,” he said at a briefing in Bangsar.

He said war-risk premiums are adjusted according to exposure levels in internationally designated conflict zones, after which insurers reprice coverage accordingly.

“These adjustments can also ripple through the logistics chain, as shipping costs and operating expenses rise on higher-risk routes,” he added.

In severe cases, war-risk cover may be suspended for specific zones, leaving cargo owners to seek alternative arrangements.

Chua said the marine, aviation and transit (MAT) insurance segment has also been affected by weaker global trade flows, sanctions and geopolitical disruptions, which have slowed growth.

He said claims patterns remain mixed, with higher frequency for bulk goods and more severe losses for specialised or high-value cargo.

“For high-volume goods, claim frequency tends to be higher, while for specialised or high-value cargo, severity is significantly greater,” he said.

PIAM said broader geopolitical tensions and supply chain disruptions continue to create volatility in pricing and underwriting conditions.

Chua advised cargo owners to assess shipping routes carefully and understand exposure to conflict areas when arranging coverage.

“Once shipments enter high-risk zones, cost implications can be significant,” he said.

Despite the challenges, he said the industry remains resilient, though external risks will continue shaping pricing trends in the months ahead.

He added that insurers must continue balancing pricing and risk exposure as global uncertainties persist.

PIAM also noted that geopolitical tensions — including conflicts, sanctions and supply chain disruptions — are adding pressure to the insurance landscape, affecting both pricing and coverage availability.

Chua said insurers are closely monitoring developments as prolonged instability could further impact underwriting decisions and risk appetite.

The ongoing conflicts in Israel-Palestine, Ukraine-Russia and US-Iran tensions have disrupted the global energy market. Prime Minister Datuk Seri Anwar Ibrahim has said Malaysia’s fuel supply remains secure until at least June 2026.

Economy minister Akmal Nasrullah Mohd Nasir meanwhile noted that June and July 2026 are considered a “critical period” for supply stability.