Shipping companies suspend insurance for ships linked to Saudi Arabia

The Financial Times reported that shipping companies have stopped insuring ships linked to Saudi Arabia, including those flying the flags of other countries, as major marine insurers have informed brokers that they will not provide war risk insurance coverage for ships linked to Saudi Arabia in the Red Sea.

Two brokers said that a number of the leading marine war risk insurers in the Lloyds of London market reported that they would exclude from coverage ships with any “connection to Saudi Arabia,” including ships sailing under the flags of other countries that had previously docked in Saudi ports.

The brokers added that some insurance companies are also preparing to cancel existing cargo insurance for certain vessels linked to Saudi Arabia. Ascott and Navium informed the brokers that they are preparing to cancel insurance policies for some Saudi-linked vessels in the Red Sea.

Marcus Baker, a broker at Marsh, said Saudi Arabia may be “moving into the same category” as Israel, America and Britain in the Red Sea region, as underwriters are treating ships linked to these countries with greater caution due to the higher level of risk.

Ships linked to the US, Britain, and Israel already pay higher premiums for naval war risk coverage for shipments in the Red Sea. Baker added that it was unclear when insurance would become more widely available to Saudi-linked vessels, as that depends on “when the Houthis cease their threats.”