Source: Finance Association
① The tension in the Red Sea continues to escalate, and the impact on the global shipping industry is fermenting further. Some ship insurance companies have begun to refuse war insurance for American and British merchant ships sailing in the Red Sea; ② Over the past few days, the Houthis in Yemen have intensified attacks on merchant ships to retaliate against US and British attacks on Yemen last week.
The tension in the Red Sea continues to escalate, and the impact on the global shipping industry is fermenting further. Some ship insurance companies began denying war insurance coverage for American and British merchant ships sailing in the Red Sea.
Over the past few days, the Houthis in Yemen have intensified attacks on merchant ships to retaliate against US and British attacks on Yemen last week. Since Monday, the Houthis have attacked two merchant ships with missiles, but these two merchant ships are still able to sail after being attacked.
Marcus Baker, the global head of Daxin's shipping and freight business, said that as a result of the escalating tension, insurance companies are seeking to exclude ships linked to the US, the UK, and Israel when issuing insurance for ships passing through the region, which means they will not insure these vessels.
Baker said, “Insurers are adding clauses prohibiting the participation of the US, UK, or Israel. Almost every insurance company has included similar clauses, and many of them also include terms such as' ownership 'or 'interest'.”
The insurance exemptions are too broad, and there is a risk of problems. Baker explained that while “ownership” is a relatively simple term, “interest” can be interpreted more broadly, and it can cover more unrelated factors, such as the charterer or the port the ship has previously arrived at.
The Houthis previously warned that after the US and Britain launch air strikes on Yemen, American and British ships will be legitimate targets of attack.
More and more shipping companies are refraining from sailing in the Red Sea region. According to the Wall Street Journal, British oil giant Shell has indefinitely suspended all oil shipments through the Red Sea. Japanese shipping giant MOL also announced on Tuesday that it would stop all ships crossing the Red Sea.
In recent days, after the US and British air raids on Yemen, the war insurance rate has soared. It has now risen to about 1% of the ship's value, while a few weeks ago, this figure was only 1％. This means that it currently requires around $1 million to be insured for a $100 million ship.
editor/tolk