UK insurance broker Howden has introduced a cargo war risk insurance facility to cover vessels against drone and missile strikes in the Red Sea.
Howden’s cargo war facility offers up to $50m in coverage per insured vessel.
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The highest limit so far stated is $150m per vessel.
This initiative marks the first dedicated insurance solution for cargo vessels navigating through the active conflict zones of the Bab al Mandab Strait, the Rea Sea and the Indian Ocean, Howden noted.
It aims to mitigate risks associated with geopolitical unrest and alleviate global supply chain pressures.
Howden claimed that in its first month, the product has seen policies bound across four continents, highlighting its significance in securing shipping routes through strategic areas such as the Red Sea and Suez Canal.
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By GlobalDataThe policy’s benefits extend beyond risk mitigation, offering a greener alternative to extended voyages around the Cape of Good Hope.
By enabling a more direct route, the insurance could reduce typical voyage emissions by 70%, while also saving two weeks of travel time from the Far East to Europe.
Howden associate director of cargo and commodities Ellis Morley 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 $150m per vessel.”
In the past, Howden has facilitated critical coverage such as the insurance for a UN-chartered vessel transporting grain from Ukraine and a policy enabling ship-to-ship transfer of crude oil from the floating storage and offloading vessel Safer, averting a potential environmental catastrophe.
Earlier this week, Howden expanded its Irish operations through the acquisition of Curran Connolly, a broker specialising in commercial and personal lines insurance.
