London cargo insurers take extraordinary measures in wake of Hormuz attacks

After an extraordinary meeting of the London Joint Cargo Committee to discuss the present situation in the Gulf where six tankers have been attacked in the past six weeks, a number of London cargo insurers have taken the rare decision to issue seven-days’ Notices of Cancellation for the War element of their policies.

Splash understands that so far this is only focused on oil cargoes, with the policies being reinstated after seven days with a requirement that prior approval be obtained for all transits to / from / within the Gulf and (including the Gulf of Oman) with additional premiums to be agreed for each sending. Not all markets have issued Notices of Cancellation, but more are expected in the coming days.

Underwriters are looking to the Global Cargo Watch List which provides real-time risk scores for each region as an advisory for determining appropriate additional premium rates.

Currently, additional premium rates for transits out of the Gulf are being discussed with a range between 0.125% and 0.25% making the additional premium for a $100m VLCC cargo up to $250,000.

Commenting on the insurance news out of London, Andrew Brooker, co-founder of Hong Kong insurance specialists Latitude Brokers, told Splash: “We rarely see Notices of Cancellation on War cargo policies and, as with hull insurers, the cargo market will be trying to find consensus on pricing. At the same time, importers haven’t budgeted for this which will create additional turmoil, specifically for charterers already grappling with increased War additional premiums on the hull.”