LONDON, Sept 19 (Askume) – The cost of insuring ships crossing the Red Sea has more than doubled since the beginning of September and some insurers are suspending coverage for the risk of attacks on commercial vessels by Yemen’s Houthi rebels, industry sources said.
The Iran- backed Houthi rebels first launched aerial drone and missile attacks on the waterway in November. They said their actions were in solidarity with Palestinians, who are under attack in Israel’s war in Gaza . In more than 70 attacks, the Houthis sank two ships, captured another and killed at least three sailors.
The additional war risk premium paid on ships crossing the Red Sea rose to 2% of a ship’s value from 0.7% in early September, industry sources said on condition of anonymity, while attacks on the Greek-operated Sonian tanker continued for weeks.
“Currently, we are seeing ship premiums for a voyage in the Red Sea rise by up to 2% due to fluctuations in insurer interest,” said Lewis Neville, UK chief executive (maritime, freight and logistics) at Marsh Brokers.
The Houthis have said they would attack ships belonging to Britain, the United States, or ships anchored at Israeli ports , although other vessels have also been targeted, increasing the threat and cost.
“Many smaller insurance companies are no longer willing to offer Red Sea war insurance,” said David Smith, director of maritime at insurance brokerage McGill & Partners.
“This is the first time I’ve seen an insurance company say ‘no.'”
Insurance industry sources said there are still some coverage options available, but costs are rising.
“Those who want to underwrite ships will become very selective,” one underwriting source said, suggesting that insurers are becoming increasingly cautious and selective. “Potential target ships are now trying to find cover.”
The Sonian, which was attacked on Aug. 21, was carrying about 1 million barrels of crude oil, the EU naval delegation said on Monday.Pulled off with no oil leaks .
Three sources said no claims have been filed against Sonian, whose fortune is estimated to be worth $80 million.
He pointed out that the war insurance policy was provided by a syndicate headed by underwriter Britt. The syndicate of underwriters also included Antares, Equi, Hamilton, Westfield and Aspen.
Aspen and Britt, which is owned by Canadian insurer Fairfax, both declined to comment. Antares, Equi, Hamilton and Westfield did not respond to requests for comment.
