Yemen’s Houthi rebels have recently resumed attacks on Red Sea shipping, resulting in fatal strikes on two bulk carriers and causing significant turmoil in the global marine insurance market. According to multiple industry sources, companies whose vessels have previously called at Israeli ports are now struggling to secure war risk insurance for ships navigating the Red Sea.
As previously reported by maritime news outlets, the 63,300-dwt *Magic Seas* (built in 2016), owned by Greek shipowner Stem Shipping, and the 36,800-dwt *Eternity C* (built in 2012), managed by Cosmoship Management, were sunk in the Red Sea. The Houthis claimed that the company operating *Magic Seas* violated their ban on entering “occupied Palestinian ports,” while *Eternity C* was linked to a fleet that had previously docked in Israel.
Despite a months-long lull in Houthi attacks, this sudden resurgence—featuring a new “swarm” tactic involving multiple speedboats and drones—has raised high alert. Insurers swiftly withdrew war risk insurance quotes for affected vessels with almost no prior warning.
Industry experts note that the Houthis have explicitly broadened their targets from “Israeli-flagged ships” to “any fleet that has called at Israeli ports,” significantly increasing the number of at-risk vessels. According to maritime data firm Windward, at least 15,000 ships worldwide meet this definition over the past six months, accounting for one-sixth of the global merchant fleet.
As a result, war risk insurance rates for Red Sea voyages, previously between 0.2% and 0.3%, are now surging. Market reports indicate that some premiums have risen to 1% of a vessel’s value—meaning a $100 million ship would incur a $1 million premium—with further increases possible.
More alarmingly, the Houthis have demonstrated remarkable intelligence precision. Insurance sources reveal the group not only tracks fleet structures and voyage schedules but also accesses bill of lading details to accurately determine whether ships carry Israeli cargo.
The market is currently reassessing risks. While some underwriters have temporarily withdrawn due to uncertainty, war risk insurance has not entirely collapsed. However, the consensus is clear: vessels with any “direct or indirect link” to Israel will face extreme difficulty securing coverage.
Munro Anderson, head of marine war risk at Vessel Protect, stated: “The market will still insure some ships, but premiums must reflect the real risk level. Any connection to Israel now makes a vessel the Houthis’ primary target.”
Since early this year, the Houthis have shifted targets multiple times—from retaliating against U.S.-U.K. airstrikes by attacking “Western assets” to focusing on Israeli-linked ships after declaring a blockade on Haifa Port in May. This week’s consecutive strikes signal another expansion in their scope, possibly indicating a major shift in leadership or tactics.
Anderson noted: “This change cannot be ignored. The Houthis appear to have returned to their mid-2024 attack tempo, and the market must quickly adapt to the emerging risks.”
