The Galaxy Leader cargo ship, which was seized by the Houthis a week ago, off the Yemeni province of Hodeidah (French)

Sources said that insurance companies against war risks have raised insurance premiums on American, British, and Israeli ships crossing the Red Sea by up to 50%, while some insurance service providers are avoiding covering such ships due to the Houthi group targeting their ships.

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

The Houthis say they will continue to launch attacks on ships heading to Israel until the Israeli war on Gaza stops.

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

David Smith, head of ships and marine liabilities at insurance company McGill & Partners, said ships connected to the United States, Britain or Israel now pay an additional war risk premium of 25 to 50 percent more than other ships transiting the Red Sea.

Two insurance industry sources said ships related to the US, UK or Israel would be subject to higher premiums of even more than 50%.

“The ships that have encountered problems so far are almost all 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 that some insurance companies are currently avoiding covering such businesses.

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

high cost

Sources in the insurance industry said that insurance premiums against war risks for Red Sea voyages amounted to about 1% of the ship’s value in the past 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 cost for a 7-day trip.

“The apparently safe passage that the Houthis are offering to ships flying the flag 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 is part of Penn Underwriter. It is intended to provide a degree of guarantee to the commercial markets associated with those countries.”

Shipping data showed that ships are also adding messages to their announced vessel tracking information explaining the presence of a Chinese crew on board or stating that they have no relationship with British, American or Israeli companies.

The Israeli shipping company (Zim) said it was diverting its ships away from the Red Sea.

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

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

He added, "The ships operated by Iran, Russia and China and flying the flags of these countries are the only ships that can safely cross this region. The Houthis allied with Iran will not attack ships carrying these flags or these unions because Russia and China are sympathetic to Iran."

Fears are increasing that the repercussions could affect other ships.

An advisory note issued on Monday, February 5, by prominent shipping associations stated that “the level of threat to ships with Israeli, British, and American interests remains high.”

"But all owners, operators and crews must be aware that their vessel may be misidentified and understand their risk of collateral damage," the memo added.

Source: Reuters