'Underwriters will have had their eyes on possible tensions in the region since 11 September last year,' says Neil Smith of the joint war committee of Lloyd's Underwriters Associationof London. 'There could be a shift in ratings [following the Limburg incident], but at this stage any movement would still be a hiccup. Underwriters are cautious, reviewing developments on a day-to-day basis, so it takes time for any general trend to be seen.'

The 11 September attacks hit the insurance market hard, with total exposure estimated at between $38,000 million and $58,000 million. Insurers have been moving out of particularly volatile areas such as offshore energy, where premiums for mobile rigs are rising steadily. Analysts say that there is now only about $500 million available for coverage of offshore risks worldwide, compared with $4,000 million in the late 1990s.

In the run-up to the reinsurance renewal period at the end of the year, there is growing anxiety about regional developments but as yet no significant shifts in premiums. 'On the Iraqi situation, the market is inclined to sit tight until there is any action, so I don't feel we are going to see any major increase in premiums for the time being,' says Saurab Nakra, senior consultant at Drewry Shipping Consultantsof the UK. 'Similarly, when it comes to the tanker incident the market does not tend to react immediately to any single incident. Premiums are not likely to be affected unless the current incident can be proven to be a terrorist act and the government puts out a warning that shipping is being deliberately targeted.'