Ship insurance premiums soar as tensions rise in the Red Sea

-Ship insurance premiums soar as tensions rise in the Red Sea -

In the Gulf of Aden, "War Risk Insurance Premiums for Ships" are soaring as the U.S. shipowner, "Gibraltar Eagle," and "Zografia," the Greek shipowner, were shot by the Houthi rebels' "Anti-Ship Ballistic Missile."

According to Frode M. ørkedal, a shipping analyst at Clarkson Securities, on Jan. 16, 2024 (local time), "Over the past few weeks, premiums have generally increased from 0.1 percent to 0.5 percent of the ship's price."

But as tensions in the Red Sea escalate, it says it won't be surprised if insurance premiums "go up to 1% of the ship's price" (With the excitation of tensions in the Red Sea, we would not be surprised if inflation premium to 1% of the ship's value).

For example, "Frode M ørkedal" has a current ship insurance premium of "Product Tanker" of 10 years, valued at $60 million, which is five times the usual "$60,000."

However, if the premium is raised to 1% of the ship's price, the ship's premium is "$600,000.

Add to that the Suez Canal transit fee, roughly "$500,000," and you don't know how much you're going to get.

This increase in freight rates leads to a surge in the final consumer price of dairy products, which could lead to global inflation again.

So now, not only Conseon, but also crude oil ships and chemical tankers are choosing the route back to the Cape of Good Hope, and this phenomenon will continue for the next few months.

I wish the Korean merchant fleet, Korean maritime engineers, and sailors a safe voyage.