Association: ships in Gulf region to remain insured

Despite the war with Iran, German ships in the Gulf region can continue to be insured. This was announced by the German Insurance Association (GDV).

“Insurers are adjusting terms and prices, but are not pulling out,” said Jörg Asmussen, general manager of the GDV. War risk insurance, which typically covers damage from incidents such as mines, is also still being offered by insurers.

According to the German Shipowners' Association (VDR), shipping companies generally take out war risk insurance for voyages through and stays in high-risk areas. The VDR also represents shipping companies whose vessels are stranded in the Persian Gulf, where traffic in the Strait of Hormuz has largely come to a halt. The association states that at least 50 ships from German shipping companies are currently stranded in the Gulf.

Insurers exercised termination rights

In early March, shortly after the war with Iran began at the end of February, the GDV announced that marine insurers were exercising their termination rights on war risk policies. According to the VDR, insurers subsequently offered coverage at significantly higher prices.

This is “a standard procedure when the risk situation changes at short notice,” the VDR stated. This has resulted in high additional costs for shipowners. For large merchant vessels, six to seven-figure sums must be paid to insure them against war damage.

Insurance brokers: prices have multiplied

Raik Becker, who works for the insurance broker Marsh Risk and negotiates with insurers on behalf of shipping companies, told the German Press Agency on Wednesday that the price of war risk insurance has multiplied since the war began. He noted that, based on experience, they are on average five to six times higher than before.

Becker added that shipping companies must pay approximately 3 to 7 percent of a vessel's value for an insured voyage through a high-risk area such as the Gulf. War risk insurance is also available for ships stranded in the Gulf. In such cases, a specific time frame is agreed upon for the policy's validity.

The Strait of Hormuz is a sea passage south of Iran and one of the most important routes for the oil and gas trade. Iran is threatening free navigation in the strait and has largely brought traffic to a standstill. The US established a naval blockade on Monday.

This article was translated to English using an AI tool.

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