Marine War Risk Cargo Premium Zooms 80%

Exporters are in for another rude shock as the insurance companies have decided to increase the premium for marine war risk cargo insurance by a whopping 80 per cent from October 1.

Marine hull insurance rates are also expected to go up with Lloyds underwriters meeting in London today to decide on the new war risk rates for all vessels sailing through West Asia.

Lloyds sets the rates for marine hull and a large percentage of cargo reinsurance throughout the world.

Sources said in case of vessels passing through the Suez Canal, Red Sea, Persian Gulf, Libya and Pakistan territorial waters, the premium for marine cargo is going up from 0.0275 per cent of sum insured to 0.05 per cent.

Indian underwriters have started issuing notices to shipping companies informing them of the new rates following notices received from the Institute of London Underwriters.

In the aftermath of the attacks in the US, insurance companies have been asked to issue policies based on prudence.

The huge hike in rates will affect the Indian exporters as around 85 per cent of maritime traffic between Asia and Europe passes through the Suez Canal and the Persian Gulf route. For India, 90 per cent of its overseas trade is via ships, most of which sail through this region.

The sharp increase came as a surprise to the Indian insurers. For marine cargo, insurers were expecting a war rate of around 0.0375 per cent.