NYN | News
The sinking of the vessels Magic Seas and Eternity C in the Red Sea this week has triggered a seismic shock in the global marine insurance market. Insurance costs for ships affiliated with companies that do business with Israel have skyrocketed to unprecedented levels, amid reports that major insurance firms are withdrawing coverage for these vessels entirely.
According to a report published Wednesday by the British newspaper Financial Times, war risk insurance premiums in the maritime region stretching between Africa and Asia have surged from 0.4% to 1% of a ship’s value following Sunday’s attack on the Magic Seas, in a new escalation carried out by Sanaa-based forces.
The newspaper quoted Marcus Baker, Global Head of Marine at Marsh McLennan, as saying:
“The cost of insuring a $100 million vessel has risen from around $300,000 to $1 million per voyage,”
describing the recent changes as
“the strangest market dynamics I’ve ever seen in the insurance sector.”
According to TradeWinds, a website specializing in maritime affairs, vessels owned by companies that previously visited Israeli ports are now unable to obtain new insurance offers for transiting the Red Sea, following the resurgence of what the site described as “deadly attacks” by Sanaa forces.
The site cited sources in the marine insurance sector saying that war risk coverage has been entirely withdrawn from some ships linked to Israel — even those that visited Israeli ports only once, more than a year ago.
One source told the site:
“Our insurer told us that there is no premium high enough to cover this risk,”
highlighting how transiting the Red Sea has become a losing deal for Israeli-affiliated vessels.
Maritime security experts had earlier warned that the recent Red Sea attacks would lead to sharp increases in insurance prices — a prediction now playing out in real time.
The site also recalled that insurance premiums spiked to 2% of a ship’s value in August 2024 following the attack on the Sonion, and that the current trajectory points to further increases if maritime escalation continues.
These developments reflect the profound impact of the decision by Sanaa-based forces to impose a comprehensive ban on Israeli shipping in the Red Sea, the Arabian Sea, and the Gulf of Aden. Insurance companies now consider navigating through the region a financial risk that is virtually uninsurable.
