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Ship attacks prompt London marine insurers to expand Middle East high-risk zone

A committee representing London market marine underwriters has expanded its list of high-risk areas in the Middle East following attacks on ships at the port of the emirate of Fujairah, part of the United Arab Emirates, on May 12.

The Joint War Committee, which represents the interests of marine hull war underwriters at both Lloyd's of London and the London company market outside Lloyd's, has added Oman, the Persian Gulf and adjacent waters and the UAE to the list of areas of "perceived enhanced risk" of war, piracy, terrorism and related perils.

Neil Roberts, head of marine underwriting at the Lloyd's Market Association, which represents Lloyd's underwriters, said in an interview that as a result "underwriters will now require assureds to notify them of vessels either trading in or entering the region and that will allow insurers to assess the circumstances of each vessel and adjust terms and conditions accordingly."

He added this did not automatically mean that premiums for ships entering the new areas on the list would go up because "that's a decision for the individual underwriter in negotiation with the broker."

Roberts said the committee had taken the decision "in the absence of clarity over the likelihood of further attacks."

Explosions at the Fujairah port on May 12 damaged four ships, including two Saudi Arabian tankers, according to news reports. The Joint War Committee said in a statement on the Lloyd's Market Association website that "very little information" was available about the explosions and that "the circumstances and methods employed remain unclear."

It added that "there is no doubt that considerable damage has been done and there will be significant claims" following the attacks, and that it would keep the situation under close review.