Abu Dhabi, UAEFriday 15 November 2019

London marine insurers meet after ship attacks in Middle East

The Joint War Committee will meet again on Monday

FILE PHOTO: Lloyds of London's headquarters is seen in the City of London, Britain, July 31, 2018. REUTERS/Simon Dawson/File Photo
FILE PHOTO: Lloyds of London's headquarters is seen in the City of London, Britain, July 31, 2018. REUTERS/Simon Dawson/File Photo

London's marine insurance market failed to reach a conclusion on whether it needs to change the risk level for vessels in the Arabian Gulf after an attack on ships off the United Arab Emirates earlier this week.

The Joint War Committee, which includes Lloyd's Market Association (LMA) members and representatives from other insurance providers, will meet again on Monday to discuss the matter further, said the LMA’s Head of Marine Underwriting Neil Roberts.

He added that not enough information was available to the committee to make a decision in Thursday's meeting.

If the committee chooses to increase the level, insurance premiums could go up.

On Tuesday, armed drones attacked two of Saudi Aramco's oil pumping stations and forced the state producer to briefly shut its East-West pipeline. The incident came two days after an attack on four oil tankers - two owned by Saudi Arabia, one by the UAE and another by Norway - off Fujairah.

The UAE has not characterised the sabotage or blamed anyone for Sunday's ship attack, but US national security agencies believe proxies sympathetic to or working for Iran may have been behind it, a US official has said. Tehran has distanced itself from the incident, which no one has claimed.

The US, Saudi Arabia and Norway will assist the UAE in investigating the attack.

Yemen's Houthi-run Masirah TV said the group had carried out the drone attacks on "vital" Saudi installations in response to "continued aggression and blockade" on Yemen.

"At the moment there are not many facts or verifiable information (about the attacks on Sunday)," Mr Roberts said on Wednesday.

"There is no decision yet on whether to change the listed areas of enhanced risk. There are a number of options, which include no change."

He said any changes would take seven days to come into effect.

"Ships going into the Gulf already have to inform underwriters; the question is whether vessels within the Persian Gulf and operating there are additionally exposed."

The Joint War Committee, which comprises syndicate members from the LMA and representatives from the London insurance company market, normally meets every quarter to review areas it considers high risk for merchant vessels and prone to war, strikes, terrorism and related perils.

It has not updated the list of high risk areas since June 2018. Its guidance is watched closely and influences underwriters' considerations over insurance premiums.

Some oil and shipping companies said they would have to alter their routes or take precautions near Fujairah since Sunday's attacks.

Updated: May 16, 2019 08:25 PM

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