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Persian Gulf issues prompt spike in shipping insurance costs

Persian Gulf issues prompt spike in shipping insurance costs | Insurance Business

Persian Gulf issues prompt spike in shipping insurance costs

Insurance underwriters are increasing premiums for ships that pass through the Persian Gulf in response to recent attacks in the region.

Sources told The Lodestar that after the attack on two tankers on June 13, 2019, war-risk insurance premiums have soared for the region. The source added that supertankers are being charged a $200,000 additional premium per voyage due to the heightened risk.

The increases have also led shipping companies like CMA CGM to place a war-risk surcharge for cargo being shipped into and out of ports in the Persian Gulf. CMA CGM and its subsidiary APL will charge a war-risk surcharge of $36 per TEU (Twenty-Foot Equivalent Unit) from July 05 for all Persian Gulf trades – except the US and China, where it will take effect on August 01.

CMA CGM said that the non-negotiable charge was necessary “considering the recent incidents in the Strait of Hormuz and the related significantly increasing insurance costs in the Middle East Gulf region.”

Other carrier companies are expected to pass similar measures; a source even told The Lodestar that an advisory is being prepared on the matter.