By Staff Reporter
ISLAMABAD: Pakistan has been struck from a London insurance market list of high-risk maritime zones, a change the government says will lower shipping costs and strengthen the country’s pitch to global trade and logistics firms.
The Lloyd’s Market Association’s Joint War Committee removed Pakistan and its territorial waters from its Listed Areas, Federal Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry said on Thursday. The panel, which represents underwriters at Lloyd’s and the International Underwriting Association in London, compiles the list to flag waters where vessels face heightened risk from war, terrorism and related perils.
Ships entering Listed Areas are typically required to notify their war-risk underwriters in advance and may be charged added premiums, a cost that shipowners often pass on through freight rates. Pakistan’s exclusion from the roster removes that requirement for vessels calling at its ports.
Chaudhry called the decision a “historic achievement” that would bolster confidence among international shipping lines, traders and investors, and improve the standing of Pakistani exporters in global markets. He said the change could help draw shipping traffic and investment to Karachi Port, Port Qasim and Gwadar, and open the door to more transit and transshipment business routed through the country.
Pakistan had sat on the JWC’s Listed Areas for roughly two decades, a designation the government traces to the period following the September 2001 terrorist attacks on the US and the war on terror that followed. That status was compounded in March, when the committee widened its highest-risk maritime zone — covering the Arabian Gulf, Gulf of Oman, Gulf of Aden and southern Red Sea — and extended its notification boundary eastward along Pakistan’s coastline, citing escalating tensions in the Middle East.
Chaudhry said Islamabad moved to challenge Pakistan’s inclusion on the broader list on March 13, arguing the designation had saddled the country’s shipping and trade sector with unwarranted war-risk premiums and surcharges for years. Prime Minister Shehbaz Sharif set up a committee under Chaudhry to press the case, which held a series of negotiations with Lloyd’s officials, presenting technical and security data to argue for Pakistan’s removal.
The talks stretched on for months, including sessions held after Ramadan iftars, according to Chaudhry, before the committee agreed to take Pakistan off the list.
“The removal of Pakistan and its territorial waters from the Listed Areas will reduce the additional financial burden on the country’s maritime trade and help Pakistani exports compete more effectively in international markets,” Chaudhry said.
The episode had already rattled parts of Pakistan’s insurance industry. In March, domestic insurers said international reinsurers had begun invoking war-cancellation clauses on cargo policies as regional tensions rose, a move that squeezed the availability of war-risk cover even though local insurers typically cede the bulk of that risk to overseas reinsurance and retakaful markets. Industry executives at the time said any restoration of coverage would hinge on how quickly regional tensions eased.
Chaudhry said the government intends to keep pressing to improve maritime safety and efficiency, expand port capacity and draw fresh investment into the sector, framing Thursday’s decision as a step toward establishing Pakistan as a regional hub for logistics, transit and transshipment.
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