LONDON - London shipping insurers have agreed to provide an additional $1 billion in cover for vessels sailing through the Strait of Hormuz, a vital trade route paralyzed by war in the Middle East, in a statement seen by AFP on Friday.
Insurance company Beazley said it would lead a "maritime war consortium" to provide additional protection through Lloyd's, the leading insurance market.
"This consortium is designed to support the maritime sector with additional war insurance capacity as it deals with the complex and evolving situation in and around the Strait of Hormuz," he said, launching Al Arabiya from AFP (17/4).
The facility "will be offered to vessels and their cargo as they pass through the Strait of Hormuz; the protection will be in line with Beazley's risk appetite and in line with all global sanctions," he added.
"This arrangement will help in keeping global trade going," Beazley Chief Executive Adrian Cox said in a statement.
The war has driven up insurance payouts that underpin the world's freight industry, analysts told AFP.
The Iranian military has closed the strait to almost all ships since the war erupted on February 28 with attacks by the United States and Israel on the capital Tehran and a number of other cities.
Around 30 vessels have reported being attacked or targeted in the area, according to the UK Maritime Trade Operations Centre.
Executives in London, the world's largest shipping insurance market, insist that captains avoid the route to protect their crews, not because insurance is not available.
"Concerns about safety, not insurance availability, (are) driving the decline in ship traffic," the Lloyd's Market Association, an insurance trade body for ships, said in a report.
Previously, US Treasury Secretary Scott Bessent said at the end of March that the US shipping insurance initiative to increase the crossing of Hormuz would soon begin operations.
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