Red Sea: British and American ships scramble to find insurers

With war raging in the Middle East, the growing number of attacks in the Red Sea has prompted some insurers to suspend their war risk coverage for American, British and Israeli ships sailing through the area.

Other companies have made significant rate increases, with the cost of war risk insurance rising from 0.7% of a ship's value to 1% in just one week. The surge in prices entails paying hundreds of thousands of dollars more for a seven-day voyage.

Rising tensions in the Red Sea have led to an increase in insurance rates and Suez Canal transit fees.

Some commercial vessels are finding it more cost-effective to take the longer route around the Cape of Good Hope in South Africa. Although this alternative route now costs less, it delays deliveries by 10 to 14 days, which could lead to supply chain disruption.