By Jonathan Saul
LONDON (Reuters) – War risk insurance premiums have risen for trips to the Red Sea after three ships were attacked in the area on Sunday and fears are growing over increasing dangers to commercial shipping, maritime and insurance sources said on Monday.
The incidents are the latest in a series of attacks in Middle Eastern waters since a brutal war broke out between Israel and the Palestinian Islamist group Hamas on October 7.
The three commercial ships were attacked in international waters in the southern Red Sea, the US military said on Sunday.
Yemen’s Iran-backed Houthi group claimed drone and missile attacks on two Israeli ships in the area.
“It has now become clear that the Houthis will attack anything at sea that has ties to Israel or Israelis, no matter how weak the ties may be, and no matter the risk of collateral damage to non-Israelis, for example crew members,” said Jakob Larsen . , head of maritime safety and security at shipping association BIMCO, told Reuters.
Israeli military spokesman Admiral Daniel Hagari said the two ships mentioned by the Houthis had no connection with Israel. US Central Command said the three ships were linked to 14 separate countries.
Larsen said the industry would welcome an increased Navy presence in the area.
“Faced with the threat from military formations such as the Houthis, merchant ships rely on protection from naval units,” he said.
“There is little a merchant ship can do to protect itself from weapons of war. Taking another route out of the area is a valid consideration, especially for ships at increased risk.”
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LONGER ROUTES
Israeli container shipping company Zim said last week it would divert some of its ships from the area as a temporary measure, meaning longer journey times.
The London insurance market has included the southern Red Sea among its risk areas and ships must notify their insurers when passing through such areas and also pay an additional premium, usually for a period of cover of seven days.
Insurance industry sources said war risk premiums remained stable Monday at 0.05% to 0.1% of a ship’s value, compared with about 0.03% estimated last week before the attacks. This translates into tens of thousands of dollars in additional costs for a seven-day trip.
Transport costs in this region are expected to rise further, says Corey Ranslem, CEO of UK maritime risk consultancy and security firm Dryad Global.
“The increase in insurance premiums will contribute to higher costs,” he said.
“Additionally, the increase in perceived risk may result in a significant number of ships choosing to bypass the region altogether, preferring longer routes, such as circumnavigating the Horn of Africa.”
The US military said on Sunday it would “consider all appropriate responses in full coordination with its international allies and partners.”
Bahamas-flagged ships were among those hit in the various attacks.
The Bahamas delegation told a previously scheduled meeting of the UN Shipping Agency in London on Monday that there had been a “deliberate attack on international shipping” in a critical region.
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“Whether or not you are directly involved in this aspect, we all ultimately pay for it – every country that depends on international shipping,” the Bahamas delegation said.
In January, shipping organizations scaled back risk assessments in the Indian Ocean, where the Rea Sea leads, after Somali piracy was brought under control.
