Attack Seen As Isolated Incident, Insurance Premiums Stay Put

Time:2013-09-06 Browse:49 Author:RISINGSUN
An attack last week on a container ship in the Suez Canal has raised concern among shippers and insurance companies, but they have no plans to re-route vessels away from one of the world`s busiest waterways or hike insurance premiums.


The Suez Canal Authority said Saturday in a statement that "terrorists targeted" the Panamanian flag-bearing container ship Cosco Asia but there was no damage to either the ship or its cargo. It gave no indication of who might have carried out the attack or what method was used.


"The situation was dealt with in a very decisive manner by the Egyptian armed forces, and the vessel resumed its trip safely to the port of destination, while Suez Canal navigation is back to normal," the statement said.


Cosco could not be reached for comment Wednesday


Shipping companies with vessels that regularly cross the Suez Canal say they are not overly concerned.


"We have asked our crews to be vigilant but we are not worried. The Suez Canal is safe and we have no indication whatsoever that insurance premiums will go up as a result of this incident," said an executive at Greek-owned, New York listed Costamare Inc., which owns 57 container ships. About 15 of them routinely cross the canal carrying cargo from Asia to Europe.


Denmark`s Maersk Line, the world`s biggest container shipping company in terms of capacity, said its business activities at the Suez remain unchanged.


"We keep monitoring the situation and pay close attention to recommendations from authorities," said Mikkel Elbek Linnet, press officer at the liner`s parent A.P. Moller-Maersk A/S. "With the current situation we do not expect any changes to insurance premiums."

 
The Suez Canal and the 320-kilometer SUMED oil pipeline running from the Gulf of Suez to Alexandria are among the most vital pieces of infrastructure in global shipping. They connect the Mediterranean Sea to the Red Sea and earn Cairo more than $5 million annually. Shipping operations at the Suez Canal have not been disrupted for the past 38 years.


Crews crossing the Suez say Egyptian military forces can be seen at various points across the 200-kilometer man-made waterway.


"There are many soldiers on the shores and constant patrols by the Egyptian coast guard, navy and air force," said the captain of a Singapore-registered ship, who asked not to be identified. "The flow across the canal is normal."


Insurance officials say there are no current plans to include the Suez Canal on a list of high-risk areas. Shipping companies must inform their insurance agents if they plan to sail through such waters. The agents then review whether to increase premiums.


"The Suez is not on the list," said Neil Roberts, senior underwriting executive at Lloyd`s Market Association which groups 57 leading global insurers. "One incident alone won`t put you on the list and we take comfort from the increased military presence."


Libya, where some oil terminals are controlled by armed rebel groups, is on that list, Mr. Roberts said.