What is the story about?
By Noor Zainab Hussain and Manya Saini
March 2 (Reuters) - As the U.S.-Israeli air war against Iran widened on Monday with no end in sight, focus shifted to the impact on airlines. Operations have been disrupted for a third day and revenue losses are not covered by insurers, analysts and insurance industry sources said.
Travel stocks from Asia to New York tumbled, wiping billions off market value, as the conflict hit thousands of flights worldwide, shut key Middle Eastern hubs and sent oil prices surging.
Here is how insurance industry experts and analysts view the event:
* Analysts at Jefferies said commercial property "almostalways" excludes war-related risks and, unlike marine andaviation exposures, such cover is not easily available as aseparate policy. * The brokerage added that notable losses in commercialproperty, such as damage to Dubai's iconic Palm Jumeirah, mightnot be covered by insurance. * Jefferies said aviation war policies also give insurersthe right to cancel cover, while the remaining non-war policiestypically exclude war, either explicitly or under force majeurewordings. * Still, an industry source told Reuters that aviationinsurers are used to dealing with such events and that there hasso far been no notice of cancellation from any insurers. * Airlines have aviation war cover for their fleets,including damage to aircraft and liability, but revenue lossesfrom operational disruption typically fall under businessinsurance policies that include war exclusions, leaving airlinesto foot the bill, a second industry source said. * Ratings agency Morningstar DBRS said the events createsignificant underwriting and investment challenges for marine,aviation, property, travel, and supply chain insurance lines. * "From an aviation-hull perspective, insurers must considerthe risk that missiles or air-defence interceptors could resultin large hull and liability claims," it wrote in a note. * Morningstar DBRS added that an expansion of the conflictin the Gulf could prompt higher pricing and reduced capacity interrorism and political violence insurance markets. * The insurance cost of shipping goods through the MiddleEast Gulf has surged as much as fivefold in the past 48 hours,with most underwriters not offering cover for sailings throughthe Strait of Hormuz, Reuters reported citing industry sourceson Monday.(Reporting by Noor Zainab Hussain and Manya Saini in Bengaluru; Editing by Tasim Zahid)
