Howden launches first Red Sea cargo war risk facility
Global insurance broker Howden has launched a new cargo war risk facility with $50 million of cover protecting vessels from drone and missile strikes by Yemeni-based militia groups in the Red Sea.
Howden’s cargo war facility offers up to $50 million of coverage per insured vessel, but the group has quoted limit as high as $150 million per vessel already while binding polices across four continents during its first month on the market.
The new policy aims to offer solutions for complex risks, like geopolitical unrest, whilst easing pressure on global supply chains. This creates a corridor for shipments to pass through the Red Sea and Suez Canal, avoiding a longer journey around the Cape of Good Hope, which reportedly adds two weeks and 70% higher emissions to a typical voyage from the Far East to Europe.
The announcement of this new facility follows other solutions brokered by Howden, including insurance for a vessel chartered by the United Nations to ship grain out of Ukraine to the Middle East and Africa in 2022, and insurance that enabled the UN to proceed with a Ship-to-Ship transfer of crude oil from the FSO Safer in 2023.
Ellis Morley, associate director, cargo and commodities, Howden, said: “The conflict in the Red Sea has presented 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$150m 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.”
Danny Whiteside, managing director, global practice leader marine, cargo & logistics, said: “This is 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.”
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