Insurance Rates Surge in Red Sea Following Fatal Ship Attacks

The cost of insuring commercial vessels transiting the Red Sea has more than doubled in recent days following deadly maritime attacks by Yemen’s Houthi forces, according to multiple industry sources.

Published on July 11, 2025

Red Sea
Aqaba on the Gulf of Aqaba, leading into the Red Sea are synonymous with the ancient spice trade that brought traders from around the globe via the Spice Route through Jordan and beyond. Today it is a thriving port and tourist centre featuring much of the traditional Arab architecture and modern day marinas, apartments, villas and of course the container port that continues to attract global custom

The cost of insuring commercial vessels transiting the Red Sea has more than doubled in recent days following deadly maritime attacks by Yemen’s Houthi forces, according to multiple industry sources.

War Risk Premiums Jump After Period of Calm

The escalation in insurance costs follows two recent fatal incidents. On Monday, a Greek-operated ship was sunk, and on Wednesday, a separate attack on the Greek ship Eternity C resulted in the deaths of four crew members. These events marked a return to heightened aggression in the region after several months of relative calm.

War risk premiums for Red Sea voyages have increased from approximately 0.3% to 0.7% of a vessel’s value, with some underwriters quoting rates as high as 1% for a seven-day period. This matches the peak pricing levels seen earlier in 2024 when near-daily attacks were occurring. The increase translates to hundreds of thousands of dollars in added costs per shipment.

Vessel Attacks Prompt Coverage Reassessments

Sources indicate that some underwriters have temporarily halted coverage for voyages in the region due to safety concerns. Neil Roberts, head of marine and aviation at the Lloyd’s Market Association, noted, “The recent attacks in the Red Sea have highlighted the need for caution when considering a transit.”

Marine officials reported that the Eternity C was carrying 25 crew members when it was attacked. Four crew members were confirmed dead, with others rescued and some still unaccounted for. Houthi forces claimed responsibility and reported detaining several of the missing crew.

Targeting Patterns Reemerge

The uptick in aggression comes after over 100 vessel attacks were recorded from November 2023 through December 2024. In May 2025, the United States announced an agreement to cease airstrikes against the Houthis in exchange for a halt in maritime attacks. However, the Houthis later stated that the arrangement did not apply to vessels associated with Israel.

Shipping data reveals that the targeted vessels had sister ships that made port calls in Israel over the past year. Underwriters are reportedly exercising increased caution, with many avoiding coverage for vessels with any perceived connection to Israel.

Munro Anderson, head of operations at Vessel Protect, a marine war risk insurance provider, stated: “What we have seen in the last week appears to be … a return to mid-2024 targeting criteria, which essentially involves any vessel with even a remote Israeli connection. With ambiguity comes risk.”

Strategic Waterway Faces Operational Pressure

The Red Sea, a vital artery for global oil and commodity shipments, has seen a significant drop in maritime traffic due to the ongoing conflict. As the security situation continues to evolve, shipping companies and insurers are closely monitoring developments and adjusting their policies accordingly.

Get the latest insurance market updates and discover exclusive program opportunities at ProgramBusiness.com