BERLIN/HAMBURG (dpa-AFX) - Despite the conflict involving Iran, German vessels in the Gulf region remain insurable, according to the German Insurance Association (GDV).
"Insurers are adjusting terms and pricing, but they are not withdrawing from the market," said GDV Managing Director Jörg Asmussen. So-called war risk insurance, which typically covers damage resulting from mines, continues to be offered by underwriters.
According to the German Shipowners' Association (VDR), shipping companies fundamentally take out war risk insurance for voyages through and stays in high-risk areas. The VDR also represents shipping lines whose vessels are currently trapped in the Persian Gulf, where traffic in the Strait of Hormuz has largely come to a standstill. According to the association, at least 50 ships belonging to German shipping companies are currently stranded in the Gulf.
Insurers Exercised Cancellation Rights
In early March, shortly after the outbreak of hostilities with Iran in late February, the GDV reported that marine insurers had exercised their cancellation rights for war risk policies. According to the VDR, insurers subsequently offered coverage at significantly higher premiums.
The VDR stated that this is "standard procedure when the risk profile changes abruptly." This has resulted in substantial additional costs for shipowners. In the case of large commercial vessels, six- to seven-figure sums must be paid to insure the ships against war-related damage.
The Strait of Hormuz is a narrow waterway south of Iran and one of the world's most critical routes for the oil and gas trade. Iran is threatening freedom of navigation in the strait and has brought traffic to a near-total halt. The United States established a naval blockade on Monday./lkm/DP/nas
