There's another big reason why shipping companies and insurers aren't willing to risk the Strait of Hormuz

A looming environmental catastrophe poses a massive risk to a region concentrated in high-rise buildings, beachfront resorts and booming commercial centers. The event could materially impair property values, tourism revenues and produce large insurance losses and reconstruction costs, creating significant downside for regional real estate, travel & leisure and insurers. Portfolio managers should consider a risk-off stance toward concentrated property and tourism exposures and stress-test holdings for severe disaster scenarios.

Analysis

A looming environmental catastrophe poses a massive risk to a region concentrated in high-rise buildings, beachfront resorts and booming commercial centers. The event could materially impair property values, tourism revenues and produce large insurance losses and reconstruction costs, creating significant downside for regional real estate, travel & leisure and insurers. Portfolio managers should consider a risk-off stance toward concentrated property and tourism exposures and stress-test holdings for severe disaster scenarios.