South Korean Insurers to Cover War Risk for 10 Ships Stranded in Hormuz

South Korean insurers are stepping up to provide crucial war insurance coverage for ten vessels belonging to our nation's small and medium-sized shipping companies, currently caught in the volatile waters of the Strait of Hormuz amidst escalating tensions between the US/Israel and Iran. This move, announced by Financial Services Commission Chairman Lee নৌকা, directly addresses the significant financial strain these companies face due to the high cost and limited accessibility of war insurance in the global market, where foreign reinsurers often dictate terms.

Traditionally, war insurance premiums are set based on the rates of foreign reinsurers, leaving smaller Korean companies at a disadvantage. They either face unaffordable premiums or outright rejection of coverage. By pooling resources, ten domestic non-life insurance companies – including Hyundai, Samsung, Meritz, KB, and Hanwha – will jointly underwrite this essential coverage for the ten stranded vessels, valued at approximately 300 billion won. This collective effort not only ensures the safety of these ships but also facilitates their return to domestic ports, with provisions for continued insurance support should they re-enter hazardous waters.

Beyond insurance, the government is bolstering its support through the Korea Asset Management Corporation's ship fund, increasing its annual scale and offering enhanced loan-to-value ratios for eco-friendly vessel acquisitions. Furthermore, the government has pledged $6 billion in financial aid to Middle Eastern countries experiencing liquidity issues due to the conflict, underscoring South Korea's commitment to regional stability and its close economic ties. This comprehensive package demonstrates a strong national response to protect our maritime interests and support our industries during this challenging period.

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We will take responsibility for guaranteeing the return of 10 vessels of domestic small and medium-sized shipping companies within the Strait of Hormuz.