Rising insurance costs in the Red Sea hurt American, British and Israeli shipping companies

Insurers against war risks have increased insurance premiums on American, British and Israeli ships transiting the Red Sea by up to 50%, the sources said, while some insurance service providers have warned that their ships may be targeted by the Houthi group. Ships are avoiding covering.

Houthi attacks since November have slowed trade between Asia and Europe and worried major powers.

The Houthis say they will continue attacking ships sailing to Israel until the Israeli war on Gaza stops.

Many companies have resorted to rerouting ships to bypass South Africa, although some ships are still crossing the Red Sea.

David Smith, head of ships and marine liabilities at insurer McGill & Partners, said ships belonging to the United States, Britain or Israel now pay additional war risk premiums 25 to 50 percent higher than other ships passing through the Red Sea. Are.

Two insurance industry sources said ships belonging to the US, Britain or Israel would attract premiums of more than 50%.

“The ships that have suffered problems so far have almost all been linked in some way to Israeli, American or British ownership,” said Marcus Baker, global head of marine and shipping services at Marsh Insurance.

Two sources said some insurance companies are avoiding covering such businesses for now.

In one of the most serious incidents, a tanker operated by a UK-based company and whose cargo was owned by global commodities trading company Trafigura was hit by a missile, causing a fire that was later extinguished.

high cost

Insurance industry sources said insurance premiums against war risks for Red Sea voyages were about 1% of the ship's value in the last ten days, up from about 0.7% previously, with various discounts applied by insurance companies.

This translates into hundreds of thousands of dollars in additional costs for a 7-day trip.

“The Houthis are clearly offering safe passage to ships flying the flags of Russia or China or owned by them, including Hong Kong and Iran,” said Monroe Anderson, chief operating officer of Vessel Protect, which specializes in shipping and war risk insurance. ” And pen is part of underwriter. Its purpose is to provide a certain degree of guarantee to the commercial markets associated with those countries.”

Shipping data has shown that ships are also adding messages to their declared vessel tracking information stating the presence of Chinese crew on board or that they are owned by British, American or Israeli companies. There is no connection with.

The Israeli Shipping Company (ZIM) said it was moving its ships away from the Red Sea.

British shipping risk and security consultancy Dry Global has advised its clients to avoid the area until further notice.

“It amazes me that ships flying US and UK flags or operated by (companies from both countries) are still passing through the Red Sea and the Gulf of Aden,” said Corey Ranselm, CEO of Dryad Global. “They represent the most dangerous category.” ships for possible attack in this area.

He further said, “Ships operated by Iran, Russia and China and flying the flags of these countries are the only ships that can safely transit this area. The Iran-allied Houthis will attack ships flying these flags or these unions.” “Won't because Russia and China are sympathetic to Iran.”

There is a growing fear that it may affect other ships.

An advisory note issued on Monday, February 5, by major shipping associations said that “the threat level to vessels with Israeli, British and US interests remains high.”

“But all owners, operators and crew should be aware that their vessel may be misidentified and should understand the risk of accidental damage,” the memo said.

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