War insurance costs to Israel soar after Iranian attacks, sources say

By Jonathan Saul

LONDON (Reuters) -War risk insurance premiums for shipments to Israel are as much as three times higher than a week ago as the war between Israel and Iran entered its fifth day, industry sources said on Tuesday.

The cost of a seven-day voyage to Israeli ports was quoted between 0.7% and 1.0% of the value of a ship, versus around 0.2% a week ago, they said.

War risk premiums to Israel are still below a peak of over 2% in November 2023 that were quoted after a Hamas attack on Israel killed 1,200 people and triggered the Israeli invasion of Gaza.

Individual underwriters will price risk and rates differently, but this will add tens of thousands of dollars of extra daily costs for every voyage.

"Calls specifically to Israel are very much on a case-by-case basis with rates increased to anywhere up to 1% for a 7-day call, dependent on what cargo, ownership and port," David Smith, head of marine with insurance broker McGill and Partners, told Reuters.

Israel relies on sea lanes for much of its imports which are shipped to gateways that include the Mediterranean ports of Ashdod, which is close to Gaza in the south, and Haifa in the north, as well as the Red Sea port of Eilat.

Israel's Bazan Group shut down its Haifa oil refinery, the country's largest, on June 16 after its power station was damaged in an Iranian attack.

Nearly 30 vessels, many general cargo ships, were currently anchored around Haifa's bay, according to MarineTraffic ship tracking data on Tuesday.

All port terminals in Haifa were operating normally and remained fully operational, an Israeli source involved in Haifa's port industry said.

Many shipping companies are already wary of sailing to Israel due to the higher risk profile.

Yemen's Iran-backed Houthis have said they will attack any Israel-linked vessels despite reaching a ceasefire over U.S. and UK-linked ships in the Red Sea.

The militia announced in March a "maritime blockade" on Haifa port in response to Israel's ongoing conflict in Gaza.

(Reporting by Jonathan Saul; Editing by Emelia Sithole-Matarise and David Evans)