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It's been claimed in a popular video on the FSK bridge as some side comments (towards the end, last 3 minutes or so) that

  • The insurance companies are making money "hand over fist" in selling war insurance for sailing through the Red Sea because the Houthis aren't doing that much damage (i.e. the insurance claims paid are far below the insurance premiums collected.) https://youtu.be/2Wim-_Q_59o?t=1428

  • The main issue why ships prefer to go around Africa is [thus] not the Houthi attacks themselves but the high [war] insurance costs for sailing through the Red Sea right now. https://youtu.be/2Wim-_Q_59o?t=1535

These are both somewhat 'soft' claims, in that no specific numbers are advanced, and the latter does speak of motivation, but I suppose it's possible some ship owners have talked about their calculus on this.

So are these claims true?

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  • 1
    So why don't they skip the war insurance and go through the Red Sea? Is it (3) because they can charge more for the longer journey? Apr 2 at 12:12
  • FWTW, the underlying claim that insurance went up a lot for the area appears true "Cost of Red Sea shipping insurance rises 2,700% [...] So a war insurance cost of 2 percent for a vessel worth $100 million would mean its owner having to pay $2 million to sail through the risk area." But that doesn't get to whether most of that gets turned into profits for the insurance companies. Apr 3 at 10:52
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    @Schwern: actually, war insurance is pretty much like that swedishclub.com/insurance/marine/war A checkbox that you can check or not. Apr 3 at 23:06
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    @thegodsfromengineering WW3 is an act of Oh My God.
    – Schwern
    Apr 4 at 18:07

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