Howden reveals new cargo war risk facility for ships in the Red Sea
Howden reveals new cargo war risk facility for ships in the Red Sea | Insurance Business Canada
Marine
Howden reveals new cargo war risk facility for ships in the Red Sea
It has a coverage of up to US$50 million per insured vessel
Marine
By
Kenneth Araullo
Global insurance group Howden has announced the introduction of a new cargo war risk facility aimed at providing coverage for vessels against drone and missile attacks by Yemeni militia groups in the Red Sea.
The new insurance facility offers coverage up to US$50 million per vessel, with the highest coverage amount provided so far reaching US$150 million. The facility specifically targets risks in the Bab al Mandab Strait, the Red Sea, and the Indian Ocean, areas currently affected by active conflicts.
Howden noted that this is the first insurance product specifically designed to safeguard cargo vessels operating in these high-risk zones, demonstrating the firm’s initiative in addressing complex global risks and mitigating the impact on international supply chains.
Within the first month of its launch, Howden said that it had already secured policies across four continents, offering a more efficient route for shipments through the Red Sea and Suez Canal. This route avoids the alternative of navigating around the Cape of Good Hope, which can extend a typical Far East to Europe voyage by two weeks and increase emissions by 70%.
Ellis Morley, associate director of cargo and commodities at Howden, explained how the conflict in the Red Sea is presenting a significant obstacle to clients with operations in the region.
“Vessels are seeking protection as they navigate this security hotspot, and we have worked with specialist marine underwriters to launch this facility, protecting cargo in the region up to a limit of US$150 million per vessel. We are harnessing Howden’s collective expertise to offer a clear path forward and helping to find solutions to global supply chain pressures,” Morley said.
This is the latest initiative introduced to solve complex scenarios in recent years. These have included brokering insurance for a United Nations-chartered vessel that transported grain from Ukraine to the Middle East and Africa in 2022, and facilitating insurance for a ship-to-ship transfer of crude oil from the FSO Safer, which averted a major oil spill and environmental disaster.
Danny Whiteside, managing director and global practice leader for marine, cargo & logistics at Howden, highlighted the new facility as another example of insurance “being a force for good in the world.”
“Howden has accessed London’s specialist marine insurance market, and in doing so we’re helping to address the direct impact of the conflict in the Red Sea and helping our clients to chart a course through chaos,” Whiteside said.
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