Insurance premiums for commercial vessels navigating the Red Sea have surged once again as Houthi attacks on ships linked to Israel intensify. The latest incidents involved bombings that killed and injured multiple sailors, prompting alarm across global shipping and insurance sectors.
According to Marco Baker, global head of marine and logistics at Marsh McLennan, ship owners must now pay around 1% of a vessel’s value to insure Red Sea transits. This marks a sharp increase from previous rates of 0.2% to 0.3%, when attacks had largely ceased in recent months. The sharp rise signals that risk levels have returned to those seen a year ago, according to insurance sources.
The increased war risk premiums reflect growing concern among insurers over the safety of the Europe-Asia shipping corridor. These extra costs, borne by ship owners or charterers, are expected to raise transportation costs for vessels that continue using the Red Sea. Meanwhile, many others have opted to reroute around Africa, adding significant distance and fuel expenses.
The Houthi group, which began targeting vessels off Yemen’s coast in November 2023—claiming retaliation for Israel’s actions in Gaza—has continued to attack ships it views as linked to Israel, the U.S., or the U.K., or those previously attacked. These vessels now face especially high insurance rates, further discouraging transit through the region.
