Houthi attacks on commercial ships in the Red Sea have caused a sharp rise in the prices of marine shipping insurance contracts. Fees are being imposed to cover risks associated with conflicts, in addition to a significant increase in the cost of shipping as a result of taking a longer alternative route.
The current rate of insurance fees related to conflict risks ranges between 0.6 and 1% of the ship’s value, which constitutes huge sums. Before the Israeli war, between 12 and 15% of global trade transited through the region.