Marine insurance rates soar in the Red Sea

Following the heightened level of insecurity off the coast of Yemen, ships transiting the Red Sea are facing a doubling of their marine insurance premiums.

Since 21 August 2024, the Greek-flagged oil tanker “Sounion”, carrying 150 000 tonnes of crude oil, has been the target of several attacks by Houthi forces off the Red Sea port city of Hodeida.

Consequently, some insurers proceeded to increase the war risk premium for ships sailing through this area. The premium has gone up from 0.4% of the ship's value to 0.75%.

This rate increase is expected to generate additional costs estimated at hundreds of thousands of dollars for a single voyage in the region.

Meanwhile, other insurers have stopped underwriting new covers in the region, due to the potential risk of attacks on, and sinking of ships.