
Insurance costs for ships passing through the Red Sea have risen sharply after Houthi rebels resumed attacks on merchant vessels, threatening the flow of global trade. According to the world's largest insurance broker, these developments have directly contributed to the increase in war risk premiums.
According to data from Marsh McLennan, the world's largest insurance broker, the premium (the amount of money for insurance) for passage through this strategic waterway has risen from a maximum of 0.4% to up to 1% of the total value of the ship. This means that for a ship worth $100 million, the insurance has increased from $300,000 to $1 million for each voyage.
The attack on the Magic Seas, a cargo ship owned by Stem Shipping from Greece, was followed by another attack on Monday on the Eternity C, a Liberian-flagged ship.
Prices could rise further if ships continue to pass through the Red Sea, one of the most important hubs of global trade. In addition to higher insurance costs, the increase in attacks could cause oil prices to rise and delays in the supply of goods.
The attack on the Magic Seas was the first of its kind by the Iran-backed Houthi rebels since December. They claimed the ship was sunk after being hit with gunfire, mortar shells and naval drones, and said the attack was in retaliation for “violating the ban on entry to ports in occupied Palestine (Israel).”
Meanwhile, the attack on the “Eternity C”, operated by the Greek company Cosmoship, used naval drones and grenade launchers launched from small boats. Three sailors were reported to have been killed. So far, the Houthis have not claimed responsibility for this attack.
Israel responded immediately after Sunday's attack, striking targets linked to the Houthi movement, including the ports of Hodeidah, Al-Salif and Ras Isa, as well as a power station. Among the targets was the Galaxy Leader, a car carrier that was captured in November 2023 in the first Houthi attack on commercial vessels. The Israel Defense Forces said it was equipped with radar to track international ships for terrorist operations.
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