- Insurance premiums for Red Sea voyages surge over 230%, now exceeding $1 million per trip.
- Houthi militants escalate attacks on commercial vessels, targeting Greek-operated ships..
- Israel conducts retaliatory strikes on Houthi-controlled military sites in Yemen
The cost of insuring vessels transiting the Red Sea has surged dramatically as Houthi militants escalate attacks, posing serious threats to maritime safety and disrupting global trade routes. According to the Financial Times, war risk insurance premiums have reached up to 1.3% of a vessel’s value—surpassing $1 million per voyage, a sharp rise from just $300,000 a few days prior.
Marcus Baker of Marsh McLennan, the world’s largest insurance broker, described the spike as “stranger than I’ve seen before.” The premium hike followed coordinated attacks on Greek-operated commercial vessels, involving rocket-propelled grenades, drones, and small boats. Before these assaults, war risk premiums hovered around 0.4%.
Escalation of Violence Against Commercial Vessels
Recent attacks targeted Greek-operated ships allegedly linked to Israeli trade routes. The first vessel was struck with heavy weaponry in a retaliatory action, and within 24 hours, another ship came under attack, this time involving sea drones and fast-moving boats. Reuters reported multiple crew fatalities, although Houthi forces have not officially confirmed the second assault.
Israel Retaliates with Strikes on Houthi Positions
In response, Israel launched targeted airstrikes against Houthi military infrastructure in several Yemeni ports. The Israeli Defense Forces (IDF) also reported destroying a vessel that had previously been hijacked and allegedly converted into a surveillance platform used to monitor merchant ships.
Global Shipping Disruption Looms
The Red Sea—an essential artery for global trade via the Suez Canal—remains increasingly volatile. The threat of further attacks may push more shipping lines to reroute around the Cape of Good Hope, adding significant delays and cost burdens.
With insurance premiums rising and risk levels growing, shipowners are facing a dilemma reminiscent of the early 2024 shipping crisis, when disruption caused global delivery delays and bottlenecks.
“It is expected that these rates move further upwards if shipping continues to use the corridor for transit,” warned Baker in his Financial Times interview.
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Source: Sri Lanka Guardian
