War risk premiums for voyages through the southern Red Sea have already jumped to between 1% to 2% of the value of a ship from 0.3% before the Houthi announcement, sources have said..
Attacks on ships by Yemen’s Houthis have prompted London’s marine insurance market to widened its “high risk” zone in the Red Sea.
The Joint War Committee comprises syndicate members from the Lloyd’s Market Association and representatives from the London insurance company market and its guidance influences underwriters’ considerations over insurance premiums.
The extended high-risk zone takes in more of the Red Sea coast adjacent to Saudi Arabian ports and reaches close to the Saudi port of Jizan, The JWC said in a July 29 advisory.
The Iran-aligned Houthis on July 20 declared a maritime embargo against Saudi Arabia, opening a new front against the U.S. and its allies in the Iran war.
The JWC said it had “adjusted the Red Sea notification line northwards” after two Saudi-linked vessels were attacked in the first few days following the Houthi announcement.
“The decision …to amend those listed areas reflects the recent escalation by the Houthis and their attacks on Saudi vessels in the Red Sea,” Neil Roberts, head of marine and aviation with the LMA and the JWC secretary, said in a statement on Thursday.
War Risks Costs Rising
Even small changes to war insurance add hundreds of thousands of dollars in extra costs for a seven-day voyage.
Indicative war risk premiums for Saudi Arabian ports further north of Jizan – including Jeddah and the critical Saudi oil terminal of Yanbu – have jumped in the past 24 hours to 1% from 0.25% earlier this week, insurance industry sources said on Thursday.
War risk premiums for voyages through the southern Red Sea have already jumped to between 1% to 2% of the value of a ship from 0.3% before the Houthi announcement, sources have said..