Key facts
- An attack by Iran has put pressure on the shipping insurance market.
- War-risk premiums had recently narrowed significantly.
- The Strait of Hormuz has been effectively closed for nearly three weeks.
- 23 vessels have been attacked since the conflict began.
- War insurance premiums had risen to between 3.5% and 7.5% of a vessel's value, up from 0.25% before the war.
- The primary deterrent to shipping is fear, not insurance cost.
An attack on a ship by Iran has put pressure on the shipping insurance market, which had seen war-risk premiums narrow considerably in recent days. The Strait of Hormuz has been effectively closed to maritime traffic for nearly three weeks, impacting an estimated 1,000 vessels and their crews.
According to analysts, 23 vessels have been attacked since the conflict began, with several crew members killed. War insurance premiums had soared to between 3.5% and 7.5% of a vessel's value, a significant increase from 1% to 1.5% a week prior and 0.25% before the war. However, brokers note that the 'fear factor' rather than the cost of insurance is preventing companies from moving their vessels out of the perilous region.
Hapag-Lloyd reported that one of its cargo ships was hit by shrapnel, causing a small fire that the crew extinguished without injuries. The company has six vessels and 150 crew members currently in the Gulf.