Marine Insurance in 2026: The Coverage Process in a Changed Operating Environment

At a Glance

• Marine insurance is being asked to price risk in an operational environment that has changed structurally, with sanctioned fleets, degraded AIS reliability, and open conflict in the world’s most consequential energy chokepoint now defining the baseline conditions insurers must underwrite against.
• The four-stage insurance coverage process, from underwriting through compliance screening, policy issuance, and claims handling, now depends on data integrity and behavioral intelligence in ways that the pre-2022 marine insurance workflow did not.
• Static, one-time checks such as flag verification and registered ownership review are no longer sufficient on their own to establish the compliance picture of a counterparty vessel, given that roughly 62% of tankers active in the Iran trade are falsely flagged and 87% are sanctioned.
• The insurance certificate itself has become a piece of evidence in the sanctions enforcement environment, with the U.S. Shadow Fleet Sanctions Act of 2026 proposing to make lack of adequate marine insurance a sanctionable condition for vessels moving certain Russian commodities.
• Roughly a third of tankers crossing the Baltic in early 2026 presented insurance certificates from sanctioned Russian or Russian-linked insurers, meaning legitimate insurers now need to prove their coverage is clean, not just claim it.
• The complexity across all four stages traces back to the same underlying condition: the data that marine insurance workflows have historically depended on is now less reliable in exactly the regions where the insurance is most needed.

Pricing Risk in a Changed Operating Environment

Marine insurance has always been a business of pricing what cannot be fully seen. Vessels operate in remote waters, cargoes cross jurisdictions, and the operational reality of a voyage often becomes clear only after it has ended. The insurance industry has managed this uncertainty for centuries by refining the data, the analytics, and the contractual mechanisms that translate operational reality into priced risk.

What has changed in 2026 is the structural reliability of the data itself. The AIS signal that marine insurance workflows have depended on for two decades is increasingly being jammed or spoofed at scale in the regions where insurance exposure is most concentrated. The shadow fleet that operates outside conventional maritime enforcement now represents a meaningful share of tanker capacity globally. Sanctioned entities cycle through flags, ownership structures, and insurance arrangements faster than screening tools can follow. In addition, open conflict in the Strait of Hormuz, which handles roughly a fifth of the world’s seaborne oil, has forced insurers to reprice risk in a market where visibility is degraded, and precedent is limited.

The four-stage marine insurance coverage process, from underwriting through compliance screening, policy issuance, and claims handling, was not designed for this environment. Each stage now carries analytical and operational complexity that was not present, or not present at the same scale, five years ago. What follows walks through where the complexity manifests in each stage and what it means for the insurers, brokers, and reinsurers operating across them.

Stage One: Underwriting in a Data-Compromised Environment

Underwriting is the stage where the risk picture gets built. The underwriter assesses the vessel, the ownership, the flag, the trading pattern, the cargo profile, and the historical claims record, then prices the coverage against expected exposure.

Two structural shifts have made underwriting analytically harder.

The first is the erosion of AIS as a trusted single-source signal. GPS jamming affected 171,286 distinct vessels globally at least once in Q2 2026, with 3.35 million false ship-to-ship meetings recorded since Operation Epic Fury began on February 28, 2026, in which injected positioning coordinates made vessels appear to rendezvous when no meeting took place. For an underwriter pricing a vessel that transits jamming-affected regions, the AIS-based voyage history that underpins historical loss modeling is no longer clean data. The vessel may have called at ports it never visited, or may have concealed calls at ports where it did. Either possibility affects the risk picture the underwriter is being asked to price.

The second is the growth of behavioral risk that does not surface through conventional identity screening. A vessel may pass flag verification, ownership review, and sanctions list checks while exhibiting behavioral patterns that mark it as high-risk. Windward tracked 2,157 unique cargo ships and tankers over 10,000 DWT conducting at least one prolonged dark activity event in Q2 2026, nearly five times the 449 recorded in Q1. Each of those events is a moment where the vessel’s operational picture went dark for reasons that could be routine or could conceal a sanctionable activity. Static underwriting inputs cannot distinguish between the two.

The consequence for underwriters is that pricing accuracy now depends on behavioral intelligence in a way it did not before. A vessel’s ownership documents may be clean while its operating pattern indicates elevated risk. Underwriters that price on documents alone are pricing on an incomplete picture.

The rising exposure environment is also visible in the market. P&I clubs raised Excess War Risk limits for the 2026 policy year, with cover for vessels near Russia, Ukraine, and Belarus rising from $100 million to $125 million. That is a signal about where insurers see the risk headed, and about what capacity is being built to price it.

Stage Two: Compliance and Sanctions Screening

Compliance screening runs alongside and after underwriting. The compliance team verifies that the counterparty vessel, the beneficial owner, the operator, and the flag state do not appear on relevant sanctions lists, and that the transaction is permissible under applicable regulatory frameworks.

The screening problem has become structurally harder for three reasons.

The first is the pace and scope of sanctions activity. Regulators worldwide made 486 vessel designations in Q2 2026, on top of 851 in Q1. The EU 20th sanctions package designated 46 ships during the quarter, followed by the EU 21st package adopted on July 23, 2026, which introduced 218 new listings (48 individuals and 170 entities) and, for the first time, expanded designation criteria to include vessels providing services to shadow fleet ships, such as bunkering, regardless of whether the shadow fleet vessels themselves are individually designated. The U.S. designated 63 vessels in Q2, all Iran-related. The UK made 27 vessel specifications. The volume and structural changes are challenging for screening workflows built around less frequent list updates and vessel-by-vessel review.

The second is the growth of falsely flagged vessels and fraudulent registries. In Q2 2026, 275 internationally trading tankers were broadcasting the flag of a fraudulent registry. Windward has now identified 22 fraudulent ship registries, with Russia-linked tankers falsely claiming Syria and Myanmar flags for the first time during the quarter. Around 90% of tankers using fraudulent registries are Western-sanctioned. Of roughly 430 tankers currently active in the Iran trade, about 62% are falsely flagged, and 87% are sanctioned. Static checks based on declared flag do not surface these patterns.

The third is the coordination challenge across sanctions regimes. The OFAC-OFSI Comparative Overview published on June 23, 2026, formally documents the differences between the U.S. and UK sanctions frameworks across ownership calculations, terminology, jurisdictional reach, and enforcement mechanics. Compliance teams operating across both regimes need to structure screening to satisfy the more demanding standard in each dimension, which is a heavier analytical requirement than either regime alone.

The insurance certificate itself has moved from an administrative document to a piece of evidence in the sanctions enforcement environment. The U.S. Shadow Fleet Sanctions Act of 2026 (S.2904), if passed, would mandate sanctions on vessels that lack adequate marine insurance for moving Russian oil, uranium, or coal. In the other direction, roughly a third of tankers crossing the Baltic in early 2026 presented insurance certificates from sanctioned Russian or Russian-linked insurers. The consequence for legitimate insurers is that “has an insurance certificate” no longer establishes compliance in itself. Insurers now need to be able to prove their coverage is clean and their counterparty vessels are not part of the shadow fleet ecosystem the certificate could otherwise obscure.

Stage Three: Policy Issuance

Once underwriting and compliance are complete, the policy is drafted, contractual terms are negotiated, and the coverage is bound. The stage is administrative in appearance but carries analytical significance for two reasons.

The first is the drafting of sanctions clauses and their interpretation. Sanctions clauses have become standard in most marine insurance policies, but the specific language and the operational triggers vary significantly. The English Court of Appeal ruling in Tonzip Maritime (Singapore) Pte Ltd v 2 Rivers Pte Ltd, “The Catalan Sea” (May 28, 2026) is one recent example of how sanctions clauses in charterparties are being tested in court, with implications for how the same language operates in insurance policies. The specificity of the clause, the scope of the trigger events, and the operational procedures for suspension or termination all determine whether the insurer’s contractual position holds when a sanctions event occurs.

The second is the growing complexity of coverage bifurcation. The full EU maritime services ban was proposed and ultimately shelved in the 21st sanctions package, meaning European shipowners and marine service providers can continue moving Russian oil under the Oil Price Cap. The compromise leaves insurers operating in a hybrid framework, with the LNG services ban starting January 1, 2027, targeted vessel and manager designations, and the Oil Price Cap frozen at $44.10 per barrel until July 2027, but without the comprehensive maritime services restriction that had been under discussion. Policies drafted for the pre-2022 environment carry embedded assumptions that need to be reviewed against the actual regulatory framework as it emerged from the 21st package rather than the framework that had been anticipated.

The International Group of P&I Clubs’ formal response to U.S. government sanctions guidance for maritime industries is one recent example of how the P&I community is engaging with regulators to clarify the operational parameters of coverage in the current environment.

Stage Four: Claims Handling

Claims handling is where the underwriting and compliance work done at policy inception meets the operational reality of what actually happened. In a stable environment, claims are a matter of establishing what occurred, verifying that the loss falls within the policy’s coverage, and processing accordingly.

In 2026, several conditions have made claims handling analytically harder.

The first is the reconstruction problem in jamming-affected regions. When a claim involves a vessel that operated in a GPS-jammed area, the AIS-based voyage history that claims teams normally use to establish what happened may contain injected positions or missing periods. The claim reconstruction becomes a multi-sensor intelligence exercise, drawing on satellite imagery, radio frequency detection, and behavioral pattern analysis to establish the actual voyage against the AIS record.

The second is the sanctions overlay on claims. A claim on a vessel that turns out to have been involved in a sanctions-implicated voyage carries additional regulatory exposure beyond the operational claim itself. Claims teams need to be able to establish, and to document defensibly, that the covered voyage did not involve sanctionable activity. This requires the same behavioral and identity intelligence that underwriting and compliance use, applied retrospectively to the specific voyage in question.

The third is the constructive total loss environment in the Middle East Gulf. Vessels stranded during the Hormuz closure earlier in 2026 raised the constructive total loss clock for war risk underwriters. Many war risk clauses set a 12-month detention period before a constructive total loss claim can be made, with a few policies still operating on a 6-month period. Claims teams have been actively assessing whether vessels stranded in the Middle East Gulf may be declared as constructive total losses even without sustaining physical damage. Loss of hire claims are also starting to come through, though not every loss of hire policy will respond without physical loss or damage.

The English Court of Appeal ruling on sanctions clauses mentioned earlier is one recent example of how the legal interpretation of coverage in the current environment is being tested. Claims teams operating across multiple jurisdictions need to track this legal environment alongside the operational and regulatory environment.

What Ties the Four Stages Together

The complexity across underwriting, compliance, policy issuance, and claims handling all traces back to the same underlying condition. The data that marine insurance workflows have historically depended on is now less reliable in exactly the regions where the insurance is most needed.

AIS is jammed or spoofed in the Middle East Gulf, the Black Sea, the Mediterranean, and other high-exposure regions. Ownership chains are structured to defeat beneficial ownership discovery. Flags are cycled at unprecedented rates through registries that may or may not be legitimate. Sanctions designations arrive faster than screening tools can absorb. Insurance certificates themselves have moved from administrative artifacts to pieces of evidence in the enforcement environment.

The four stages of the coverage process were designed for an operational environment in which the primary data inputs, especially AIS and declared vessel documentation, could be trusted as broadly reliable. That trust is no longer generally warranted in the operational regions where insurance exposure concentrates.

The operational response is behavioral and multi-sensor intelligence. Verifying what vessels actually do, independent of what they broadcast or declare, is now a foundational requirement across all four stages of the insurance workflow.

Where Windward Fits in the Marine Insurance Workflow

Windward’s Maritime AI™ Platform provides the behavioral intelligence, multi-sensor verification, and vessel identity work that supports each stage of the marine insurance coverage process.

Know Your Vessel (KYV™) consolidates the vessel-specific risk picture that underwriters need to price beyond declared documents alone. Behavioral risk profiling across multiple voyages surfaces patterns that static checks miss, whether the workflow is underwriting a new counterparty, screening a transaction, or reconstructing a claim.

Multi-Sensor Intelligence fuses AIS, satellite imagery, radio frequency detection, and behavioral context into an operational picture that verifies what vessels actually did, independently of what their AIS broadcasts show. This is what supports defensible compliance screening in jamming-affected regions and defensible claims reconstruction when AIS data is unreliable.

The presence of a vessel in a GPS jamming-affected area is not, by itself, a behavioral risk indicator. GPS jamming is something happening to a geographic area, not something a vessel is doing. Vessel risk is assessed independently based on behavioral patterns and operating history.

Where This Leaves Marine Insurance

The response is not to abandon the four-stage process. Underwriting, compliance screening, policy issuance, and claims handling remain the operational architecture of marine insurance, and are unlikely to change in structure. What is changing is the intelligence infrastructure each stage now depends on. Behavioral analysis, multi-sensor verification, and identity intelligence that does not rely on cooperative signaling from the vessel are becoming the foundational inputs that let each stage work reliably in the current environment.

The insurers, brokers, and reinsurers positioned for the operating environment ahead are the ones treating the intelligence layer as a strategic investment rather than an operational cost. The coverage process still runs on the same four stages. It runs on different inputs.