Latest News

Red Sea insurance increases after deadly Houthi attacks

Industry sources reported on Thursday that the insurance costs for shipping goods across the Red Sea have more than doubled since Yemen's Houthis attacked two ships and sank them, killing four seafarers, after months of calm.

The Red Sea is an important waterway for oil, commodities and other goods. However, traffic has declined sharply ever since the Houthi began their attacks on Yemen's coastline in November 2023. This was said to be in solidarity with Palestinians fighting in Gaza by the Iran-aligned Houthi group.

Sources familiar with the issue said that war risk premiums had risen from 0.3% to 0.7%, compared with 0.3% the week prior to the recent attacks. Some underwriters have also paused coverage for certain voyages.

This week, rates for a seven-day period of travel, set by each underwriter, were quoted at up to 1 percent, the same as in 2024, when there was a daily attack. The additional costs of each shipment can be hundreds of thousands.

The recent attacks on the Red Sea have shown the importance of caution when planning a transit, said Neil Roberts. Roberts is the head of marine aviation at the Lloyd's Market Association. This association represents all Lloyd's of London underwriting companies.

Officials from the maritime industry confirmed that four people on board the Greek ship Eternity c were killed in a Houthi attack Wednesday. Rescuers rescued four more survivors on Thursday from the Red Sea. Houthi militants claimed to be holding some of those still missing.

The Houthis have claimed responsibility for the attack, which came after the sinking on Monday of a Greek-operated ship.

An analysis of shipping data revealed that some of the vessels' sister ships had called at Israeli ports during the last year.

From November 2023 until December 2024, the Houthis have attacked over 100 ships. The U.S. announced in May a deal that would stop bombing Houthis if they stopped attacking ships. However, the Houthis claimed the deal didn't include Israel.

Insurance sources say that underwriters will try to avoid any vessel with a connection to Israel, no matter how indirect.

Munro Anderson is the head of operations for marine war risk insurer Vessel Protect. He said: "What we've seen in the past week appears to... be a return to targeting criteria mid-2024, which involves essentially any vessel with a distant Israeli connection." "With ambiguity, comes risk." (Reporting and additional reporting by Michael Jones, The Insurer. Editing by Ros Russel)

(source: Reuters)