Cheap war insurance keeps Emirates in the air

According to reports in Financial Times, the premium is described as “outrageously cheap”, something that draws attention in a market where prices normally rise sharply with increased geopolitical risks.

War and risk insurance is crucial for airlines to be able to operate in or near conflict areas. It covers, among other things, events related to war, terror, and missile attacks.

The fact that Emirates has now managed to secure insurance at a low cost means that the company can continue to maintain traffic in the region, where other operators may be forced to reduce or reassess their presence.

The deal is said to have been led by a major insurance player (Atrium), with several companies following suit. At the same time, some insurers have chosen to stay out, citing that the price level does not reflect the current risk picture.

This points to a divided view within the industry on how risks in the region should be assessed.

The low premium can also have competitive effects. Airlines that pay significantly more for equivalent protection risk having higher costs and thus lower margins.

At the same time, the fundamental question remains: whether the risks are correctly priced - or if the insurance market is taking a calculated chance in an uncertain situation.

For Emirates, the agreement currently provides a clear advantage: the ability to continue flying where others hesitate.