The war risk cargo insurance to cover vessels sailing through the Red Sea against drone and missile attacks due to escalating geopolitical tensions.
According to Reuters, this new insurance is the “first dedicated coverage of its kind” to protect cargo vessels in an active conflict zone, including the Bab al-Mandab Strait, the Red Sea, and the Indian Ocean.
Ellis Morley, associate director of cargo and commodities at Howden, emphasized that the conflict in the Red Sea has been a significant obstacle for clients operating in the region, with vessels seeking protection in this security hotspot, Reuters reports.
The war risk cargo insurance has a 12-month term and provides cover of $50 million per vessel. Markel, a leading marine insurer, is one of the lead underwriters for the product, along with Navium as a co-lead.
The insurance was established to offer a competitive option for clients whose existing war cover had been cancelled. As informed by Reuters, Howden’s facility expands, the strategy is to maintain the insurance rating at the lower end of what is available in terms of premiums, although specific figures were not provided by Morley.