Reuters: Red Sea Shipping Insurance Costs More Than Double Due to Houthis Attacks
NYN | Reports and analyses
Reuters has confirmed that insurance premiums for Red Sea voyages have more than doubled since the beginning of September, as attacks by the Yemeni government forces supporting Gaza have increased against ships linked to the U.S. and the UK, or those that have visited Israeli ports, raising shipping risks and costs.
In a report published on Thursday, the agency noted that some insurance companies have temporarily stopped providing coverage for ships passing through the Red Sea due to the heightened risks.
Additionally, Reuters stated that the cost of insuring ships traversing the Red Sea has more than doubled, with additional war risk premiums rising to 2% of the ship’s value, compared to 0.7% at the start of September. This spike followed the attack on the Greek tanker Sonion, which remained ablaze for weeks.
The report quoted Louise Neville, CEO of Marsh UK, specializing in shipping, goods, and logistics, saying: “We are currently seeing premiums of up to 2% of the vessel’s value for a single voyage through the Red Sea, amidst fluctuating appetite from insurers.”
David Smith, Head of Shipping at McGill and Partners, remarked: “Many smaller insurers are no longer willing to cover war risks in the Red Sea. This is the first time I’ve seen insurers simply say no.”
Insurance industry sources confirmed that some coverage is still available, but costs are rising. One source added: “Insurers are becoming more cautious and selective, and ships likely to be targets of attacks are now struggling to find coverage.”
The report also mentioned that the Sonion tanker, attacked on August 21 while carrying approximately one million barrels of crude oil, was successfully towed without any oil spills, according to the European Naval Mission on Monday.
According to Reuters, no claims have yet been made regarding the Sonion, which is valued at $80 million, as reported by three sources. The war risk insurance policy was provided by a consortium led by Brit Insurance, which also included Antares, Equio, Hamilton, Westfield, and Aspen.
Finally, the agency reported that Aspen and Brit—a subsidiary of Canadian insurer Fairfax—declined to comment. Antares, Equio, Hamilton, and Westfield did not respond to requests for comment.
