Red Sea : Insurance1st 2024 Premiums Now
Red Sea war premiums have more than doubled since September, according to sources.
Houthi strikes on ships raise shipping risks and expenses.
Due to increased risks, smaller insurers are halting Red Sea battle coverage, according to sources.
September 19, London (Reuters) – According to industry insiders, the cost of ship insurance via the Red Sea has more than doubled since the beginning of September, and some underwriters are halting coverage as the likelihood of a Houthi attack on commercial vessels from Yemen rises.
November saw the first aerial drone and missile strikes on the waterway by the Houthis, who are supported by Iran.
They claim that by acting in solidarity, they are supporting Palestinians who are being attacked in Israel’s Gaza conflict. The Houthis have murdered at least three seafarers, seized one vessel, and sunk two others in more than 70 raids.
Speaking on the condition of anonymity, industry sources said that extra war risk premiums, which are paid when ships navigate the Red Sea, have been quoted at up to 2% of the vessel’s value, up from 0.7% at the beginning of September and following the attack on the Greek-operated So union tanker that was burning for weeks.
Red Sea
According to Louise Neville, UK CEO of marine, cargo, and logistics at broker Marsh, “we are seeing premiums as high as 2% on vessel value for a single Red Sea transit amid fluctuating insurer appetite.”
The Houthis have threatened to attack ships that have ties to the US, the UK, or Israel, even though other ships have been targeted, increasing the risks and associated expenses.
“Many of the smaller insurers are not ready to underwrite Red Sea war coverage anymore,” stated David Smith, head of marine at McGill and Partners, an insurance brokerage.
“It’s the first time I’ve seen underwriters just say no.”
There was still some coverage available, but the cost was increasing, according to sources in the insurance business.
An underwriting source stated, “There is a lot of selection by those still willing to write ships,” implying that insurers were become more circumspect and picky.
“Ships that are probable targets for attack are now struggling to find cover.”
The EU navy mission reported on Monday that the So union, which was hit on August 21 and carrying almost a million barrels of crude oil, was towed without any oil spill.
According to three sources, the So union is valued at approximately $80 million, although there have been no claims made against it thus yet.
They further mentioned that a group headed by underwriter Brit supplied the war insurance policy.
The group of underwriters also comprised Aspen, Westfield, Antares, Aqua, and Hamilton.
Both Aspen and Brit, a division of Fairfax, the Canadian insurance company, declined to comment.
A request for comments was not answered by Antares, Iquw, Hamilton, or Westfield.
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Red Sea : Insurance1st 2024 Premiums Now
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