Howden, a global insurance intermediary group, has launched a new cargo war risk facility to protect vessels from drone and missile strikes by Yemeni based militia groups in the Red Sea, and strengthen global supply chains.
According to the broker, this is the first dedicated insurance coverage of its kind to protect cargo vessels within an active conflict zone, which encompasses the Bab al Mandab Strait, the Red Sea, and the Indian Ocean.
The new cargo facility will offer up to $50 million of coverage per insured vessel, and the largest limit quoted so far is $150 million per vessel.
The launch of this facility comes amid significant global supply chain delays deprived from the conflict in the region.
In the first month since the launch of this new cargo war risk facility , Howden has bound policies across four continents.
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.
Ellis Morley, Associate Director, Cargo and Commodities, Howden, commented: “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.”
The announcement of this new facility follows other insurance solutions brokered by Howden for the benefit of clients, including insurance for a vessel chartered by the United Nations to ship grain out of Ukraine to the Middle East and Africa in 2022.
As well as an insurance product launched last year that enabled the UN to proceed with a Ship-to-Ship transfer of crude oil from the FSO Safer, preventing one of the world’s largest oil spills and man-made environmental disasters.
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.”
