LONDON: The cost of insuring a ship through the Red Sea has more than doubled since the start of September and some underwriters are pausing cover as the risk of attack from Yemen’s Houthis on commercial vessels increases, industry sources said.
The Iran-backed Houthis first launched aerial drone and missile strikes on the waterway in November. They say they are acting in solidarity with Palestinians under assault in Israel’s war on Gaza.
In more than 70 attacks, the Houthis have sunk two vessels, seized another and killed at least three seafarers.
The industry sources, speaking on condition of anonymity, said additional war risk premiums, paid when vessels sail through the Red Sea, were quoted up to 2% of the value of vessel from 0.7% at the start of September and after the attack on the Greek operated Sounion tanker, which was on fire for weeks.
“Currently, we are seeing premiums as high as 2% on vessel value for a single Red Sea transit amid fluctuating insurer appetite,” said Louise Nevill, UK CEO, marine, cargo & logistics, with broker Marsh.
The Houthis have said they will attack ships with links to the UK, the United States or have called at Israeli ports, although other vessels have been in the firing line, adding to dangers and also the costs involved.
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