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Howden launches cargo war-risk facility

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This photo shows the Belize-flagged vessel Rubymar sinking in the Red Sea (US military's Central Command via AP)

Howden has launched a new first-of-its-kind cargo war-risk facility to protect 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, and the largest limit quoted so far is $150 million per vessel, the organisation said.

It said that it was 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.

Early last month, the MV Rubymar became the first vessel to be sunk since Yemeni Houthi rebels began attacking ships in the wake of Israel’s siege in Gaza

The Belize-flagged, British-owned ship had been taking on water since being hit by an anti-ship ballistic missile fired by rebels on February 18.

Howden said the new policy underscored its commitment to leverage the power of insurance to develop solutions for complex risks, such as geopolitical unrest, while easing pressure on global supply chains.

Amid significant global supply chain delays, Howden said, it had bound policies across four continents in the first month since the launch of its new insurance product.

Howden said this created 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 per cent higher emissions to a typical voyage from the Far East to Europe.

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 $150 million 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, it said.

These included insurance for a vessel chartered by the United Nations to ship grain out of Ukraine to the Middle East and Africa in 2022; and last year insurance that enabled the United Nations 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.”

Ellis Morley, associate director, Cargo and Commodities, Howden (Photograph supplied)
Danny Whiteside, managing director, global practice leader, Marine, Cargo & Logistics, Howden (File photograph)

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Published April 17, 2024 at 6:15 pm (Updated April 17, 2024 at 8:35 pm)

Howden launches cargo war-risk facility

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