War risk insurance premiums edged up for Red Sea voyages after three vessels were attacked in the area on Sunday and fears grow over worsening perils for commercial shipping, maritime and insurance sources said on Monday, according to Reuters. The incidents are the latest in a series of attacks in Middle Eastern waters since a brutal war between Israel and the Palestinian Islamist group Hamas broke out on Oct. 7.
The three commercial vessels came under attack in international waters in the southern Red Sea, the U.S. military said on Sunday.
Yemen's Iran-backed Houthi group claimed drone and missile attacks on what it said were two Israeli vessels in the area.
Israeli military spokesperson Rear Admiral Daniel Hagari said the two ships cited by the Houthis had no connection to Israel. U.S. Central Command said the three vessels were connected to 14 separate nations. Larsen said the industry would welcome a strengthened naval presence in the area.
Israeli container line Zim said last week it was diverting some of its vessels away from the area, meaning longer journey times, as a temporary measure. The London insurance market has listed the southern Red Sea among its high risk areas and ships need to notify their insurers when sailing through such areas and also pay an additional premium typically for a seven-day cover period. Insurance industry sources said that war risk premiums had stayed firm on Monday at between 0.05% to 0.1% of the value of a ship, from around 0.03% estimated last week before the attacks. This translates into tens of thousands of dollars of additional costs for a seven-day voyage. Transportation costs in this region are expected to rise further, said Corey Ranslem, CEO of British maritime risk advisory and security company Dryad Global.