Red Sea insurance costs soar after renewed Houthi ship attacks in Red Sea
LONDON
The insurance cost of shipping goods through the Red Sea has more than doubled in recent days after Yemen’s Houthis attacked and sank two ships, killing at least four seafarers after months of calm, industry sources said.
The Red Sea is a critical waterway for oil and commodities but traffic has dropped sharply since Houthi attacks off Yemen’s coast began in November 2023 in what the Iran-aligned group said was in solidarity with Palestinians in the Gaza war.
War risk premiums have risen to around 0.7% of the value of a ship, from around 0.3% last week before the latest attacks took place, sources familiar with the matter said, with some underwriters pausing cover for some voyages.
Rates for a typical seven-day voyage period, which are set by individual underwriters, have been quoted this week at up to 1%, matching the peak level in 2024 when there were daily attacks. This adds hundreds of thousands of dollars in further costs for every shipment.
“The recent attacks in the Red Sea have highlighted the need for caution when considering a transit,” said Neil Roberts, head of marine and aviation with the Lloyd’s Market Association, which represents the interests of all underwriting businesses in Lloyd’s of London.
A Houthi attack on the Greek ship Eternity C on Wednesday killed four of the 25 people aboard, maritime officials said. On Thursday, rescuers pulled four more survivors from the Red Sea. Houthi militants said they were holding some of the crew still missing.
The attack followed the sinking of another Greek-operated vessel on Monday, which the Houthis claimed responsibility for.
Some of their sister vessels had made calls to Israeli ports in the past year, an analysis of shipping data showed.
The Houthis attacked more than 100 ships from November 2023 to December 2024. In May, the US announced a deal to stop bombing the Houthis in return for an end to shipping attacks, though the Houthis said the deal did not include sparing Israel.
Insurance industry sources said underwriters would try to avoid covering any vessel with links with Israel, even if it was indirect.
“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,” said Munro Anderson, head of operations at marine war risk insurance specialist Vessel Protect. “With ambiguity comes risk.”
The Greek ship Magic Seas sank in the Red Sea as a result of Houthi attacks (Reuters).
Aden: Ali Rabih
12 July 2025
As the Houthi threat to international shipping grows ever more serious - most recently with the sinking of two Greek vessels, killing three sailors and leaving twelve missing - there has been little substantial reaction from major world powers. The United States, Germany’s foreign minister, and the UN envoy to Yemen were among the few to voice concern and call for de-escalation.
While Houthi attacks intensify across the Red Sea and the Arabian Sea, insurance premiums for commercial ships in these waters have surged to as much as 1% of a vessel’s value, according to leading global insurers. This underscores the scale of the risk and the declining confidence in protecting this vital maritime corridor.
The two assaults targeted the cargo ships Magic Seas and True Confidence between Sunday and Tuesday last week. According to the EU naval mission Aspides, tasked with safeguarding Red Sea navigation, the attacks killed at least three sailors, wounded others, and left a dozen unaccounted for.
The strike on the Liberian-flagged Greek-operated True Confidence marked a dangerous escalation. The Houthis claimed responsibility, saying they used an explosive-laden drone boat and six ballistic and cruise missiles. They alleged the ship was heading to Israel’s port of Eilat, though independent verification was lacking.
Despite the scale of the violence, most global capitals limited their responses to brief statements. Only the US ambassador to the UN issued a pointed condemnation, along with remarks from a State Department spokesperson and a statement by UN envoy Hans Grundberg.
The US denounced the attacks as “terrorist and unjustified,” describing them as evidence of the “ongoing threat posed by Iranian-backed Houthis to regional maritime security and commerce.” The US ambassador stressed Washington’s commitment to denying the Houthis resources to fund such operations and called on the UN Security Council to remove obstacles blocking its expert monitoring teams in Yemen.
The State Department likewise condemned the attacks as a threat to the freedom of navigation and economic stability. “We will continue to take necessary steps to protect commercial shipping,” the statement warned, urging the broader international community to condemn the Houthis’ actions.
Germany’s Foreign Minister Johann Wadephul said Iran must use its influence to halt Houthi attacks. Speaking in Vienna alongside his Israeli and Austrian counterparts, he declared: “We strongly condemn these attacks and expect Iran to act to stop them.”
UN envoy Grundberg expressed deep concern about the sinking of True Confidence, warning of the humanitarian and environmental consequences of such operations, which violate international law and Security Council Resolution 2722. He urged the Houthis to provide sustainable guarantees to end attacks and build on prior understandings with the United States.
Oman had brokered a limited agreement last May under which the Houthis pledged to stop targeting American ships in return for a suspension of broad US-led military action - though the deal excluded Israel.
A Dangerous Precedent
Yemeni officials say the tepid reactions from much of the world send the Houthis the wrong message, reinforcing their sense of impunity. On Thursday, Houthi leader Abdul Malik al-Houthi boasted in his weekly address about sinking the vessels, calling it a “clear lesson” to any shipping company doing business with Israel.
Since November 2023, the Houthis have carried out over 150 attacks, disrupting global trade flows through the Red Sea. Their operations have sunk British and Greek ships and damaged many more, including hijacking the Galaxy Leader and holding its crew for over a year.
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