Maritime Insurer Skuld Cancels Certain War Risk Cover in Red Sea Area
Key Takeaways
- •Skuld's cancellation of certain war risk coverage in the Red Sea, Gulf of Aden, and Indian Ocean takes effect 72 hours from 00:01 GMT on August 16.
- •The cancellation was triggered by reinsurers withdrawing coverage due to escalating Houthi attacks on commercial shipping vessels since late 2023.
- •A recent attack on the cargo ship Tihamah by Houthi forces resulted in four crew member deaths, marking one of the deadliest incidents in the region.
- •The cancellation applies only to fixed-premium assureds such as owners, charterers, offshore operators, and yacht risks, while mutual P&I, FD&D, and Excess War Risks coverage remain unaffected.
- •Skuld is finalizing a buy-back option that would allow affected assureds to reinstate the cancelled war risk cover.
Marine insurance provider Skuld has cancelled certain war risk coverage in parts of the Red Sea, Gulf of Aden, and Indian Ocean amid a series of vessel attacks in the region.
The Red Sea is one of the world's most critical shipping corridors, linking the Suez Canal to the Indian Ocean and providing the shortest maritime route between Europe and Asia. Houthi forces have been targeting commercial vessels in these waters since late 2023, prompting many shipping companies to reroute around Africa's Cape of Good Hope.
The cancellation will take effect 72 hours from 00:01 GMT on August 16, according to an emailed update from the insurer issued on Wednesday.
"In light of concerning developments in the Red Sea area, which have materially increased geopolitical and operational uncertainty, the Association has received a notice of cancellation from its reinsurers in respect of certain commercially reinsured war risks," Skuld said.
"It is therefore necessary for the Association to issue a corresponding Notice to Assureds."
The announcement follows an attack on the cargo ship Tihamah, which was struck by Houthi forces off the coast of Yemen, resulting in the deaths of four crew members. The incident marked one of the deadliest attacks on commercial shipping in the region since the Houthi campaign began.
The cancellation notice applies to certain fixed-premium assureds, including owners, charterers, offshore operators, and yacht risks. Skuld confirmed that the move does not affect mutual P&I, FD&D, or Excess War Risks coverage.
Skuld also indicated that it is finalising a buy-back option that would enable affected assureds to reinstate the cancelled war risk cover.
Source: Ship & Bunker
