London ship insurers add Syria to high risk zone
Monday, 12 December 2011 | 00:00
London's marine insurance market has added Syria to a list of areas deemed high risk as violence escalates and sanctions against President Bashar al-Assad's government deepen, a senior market official said on Friday.
The United Nations estimates at least 4,000 people have been killed and over 14,000 are believed to be held in detention since March in worsening unrest.
"The situation developed to a point where it is sensible for underwriters to be made aware of any ships that are going to Syria," said Neil Roberts, senior technical executive, underwriting with the Lloyd's Market Association (LMA), which represents the interests of all underwriting businesses in the Lloyd's market.
"The physical deterioration of the political situation is one of the factors, along with the issue of sanctions," he told Reuters.
Seaborne trade is vital for Syria's oil exports. Last week the European Union stepped up sanctions against Syria's oil industry as part of a concerted push by Europe, the United States and the Arab League to increase pressure on Assad.
The Joint War Committee (JWC), which groups syndicate members from the LMA as well as representatives from London's insurance company market, this week added Syria to a list of areas it considered high risk for merchant vessels and prone to war, strikes, terrorism and related perils.
Other countries on the list include Iran, Pakistan, Somalia and Yemen.
"What this means is that underwriters get notification from people when a vessel goes there," Roberts said.
"The issues of premiums and conditions will be discussed at the time they see the risk and will be determined on a case by case basis. It will be for the market to determine any change."
The London marine insurance market plays an influential role in the global marine insurance industry.
"Traffic in and out of Syria has already fallen by over one third due to political unrest, and some operators have already reportedly started using alternate routes to bypass Syria where possible," said Rory Lamrock, intelligence analyst with security firm AKE.
"The classification may cause further reductions in traffic and routes to bypass Syrian waters will be used more frequently, ultimately hampering the availability of goods in Syria and further damaging the economy."
A Syrian pipeline carrying oil from the east of the country to a vital refinery in Homs was blown up on Thursday in what the official news agency SANA said was an act of sabotage by an armed terrorist group.
Major Western powers as well as neighbours Turkey and Jordan are calling on Assad to step down. Turkey said this week it would begin bypassing trade routes through Syria exporting to Egypt by sea and overland via Iraq following a breakdown in ties.
The JWC this week removed Qatar, Ivory Coast and the island of Mindanao in the Philippines, between the ports of Polloc Harbour and General Santos, from their high risk list.
"The risk levels have declined below a point where underwriters would require notification of ships going there," the LMA's Roberts said.
Libya remained on the high risk list, the JWC said.
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