Shipping insurance rates soar on Red Sea missile attacks

Attacks by Yemen's Huthi rebels on commercial ships in the Red Sea have sent insurance premiums surging, exacerbating costs already stretched by soaring freight rates and longer alternative trade routes.

The Huthis have carried out relentless attacks since November on shipping transiting the Red Sea, a maritime hub through which 12 percent of global trade usually passes.

Maritime container transport has sunk by almost one third so far in 2024 compared with a year earlier, according to IMF data.

The Iran-backed Huthis argue the attacks are in solidarity with Palestinians in Gaza during the Israel-Hamas conflict.

The war started when Hamas launched its attack on October 7, which resulted in the deaths of about 1,160 people in Israel, mostly civilians, according to an AFP tally of official Israeli figures.

Hamas militants also took about 250 hostages -- 130 of whom remain in Gaza, including 30 presumed dead, according to Israel.

Israel's retaliatory campaign has killed at least 29,313 people, mostly women and children, according to the latest count by the Hamas-run health ministry in the territory.

'Unusual, not exceptional'

Commercial boats need to obtain three types of insurance. Hull insurance covers damage to the vessel; cargo insurance covers the vessel's load; and protection and indemnity insurance includes coverage for damage caused to third parties.

Premiums for ships and their cargos have "increased significantly" following the Huthi attacks, according to Frederic Denefle, head of Garex, a French firm specialised in marine risk insurance.

And they have increased in proportion to the threat level, he told AFP.

The Red Sea threat is unusual but not exceptional,...