(Reuters) – The blockage of the Suez Canal is likely to lead to large reinsurance claims, adding to upward pressure on marine reinsurance rates, James Vickers, chair of reinsurance broker Willis Re International, told Reuters.
Formal investigations began this week into how the giant container ship Ever Given ran aground in the canal, shutting down shipping in the major global waterway for almost a week.
The incident and its impact on hundreds of ships delayed in the canal would be a “large loss” for insurance market Lloyd’s of London, its chairman Bruce Carnegie-Brown said this week, while Fitch Ratings said global reinsurers were likely to face hundreds of millions of euros of claims.
Vickers also said reinsurance losses were “not going to be a small amount of money”. The blockage was the latest in a growing number of man-made disasters leading to reinsurance losses, on top of a list of natural catastrophes in the past year, he said.
Reinsurers help insurers cover claims for major events such as hurricanes, in return for part of the premium. Reinsurers typically raise rates after they experience large losses.
Even before the Suez incident, the marine market “didn’t need much encouragement to keep going in an upward direction”, Vickers said.
Global marine reinsurance rates were generally seeing “high single digit” percentage point increases, Willis Re said in its April reinsurance renewals report on Thursday.
Marine reinsurance premiums have been rising for the past few years after several years of falling rates, as Lloyd’s of London and other firms have cut back on loss-making lines, reducing competition. The COVID-19 pandemic has also put upward pressure on reinsurance rates across the board.
Elsewhere, the U.S. property reinsurance market has been hit by a number of catastrophes including Winter Storm Uri in the United States in February, with rates up by as much as 25% in April, the report showed.
A huge container ship that has been stuck across the Suez Canal for almost a week has been freed from the shoreline, officials say.
The course of the 400m-long (1,300ft) Ever Given has been corrected by 80%, according to the Suez Canal Authority.
It added that further efforts to move the boat would resume later on Monday.
The Ever Given has been blocking one of the world’s busiest trade routes, forcing companies to reroute ships and causing long tailbacks.
The reports that the ship had been freed raised hopes that traffic along the canal could resume within hours, clearing the way for an estimated $9.6bn (£7bn) of goods that is being held up each day.
Rescue workers from the authority and the Dutch company Smit Salvage used tug boats to wrench the ship from the canal bank, Reuters news agency reported.
The stern of the ship, which had been four metres from the shore, was now 102m clear, the Suez Canal Authority said. It added that efforts to fully refloat the boat had begun.
Efforts to move the boat would resume at 11:30 local time (09:30 GMT) once the tide rises, officials said.
Traffic would resume once the ship is moved to a waiting area in a wider section of the canal, the authority said.
The 200,000-tonne Ever Given ran aground on Tuesday morning amid high winds and a sandstorm that affected visibility. Specialist salvage companies were brought in to help refloat the ship.
On Sunday, canal officials began preparing to remove some of roughly 20,000 containers on board in order to lighten the load.
The canal, which separates Africa from the Middle East and Asia, is one of the busiest trade routes in the world with about 12% of total global trade moving through it. It provides the shortest link between Asia and Europe.
An alternative route, around the Cape of Good Hope on the southern tip of Africa, can take two weeks longer.
A fresh effort is under way to refloat a giant container ship blocking Egypt’s Suez Canal.
Canal authorities say 14 tugboats are trying to take advantage of Saturday’s high tide and more will arrive on Sunday if today’s attempt fails.
The Ever Given became wedged in the canal – one of the world’s busiest waterways – on Tuesday.
More than 300 ships are stuck on either side of the blockage. Some ships have had to reroute around Africa.
By late Friday, dredgers had removed about 20,000 tonnes of sand from around the Ever Given’s bow, which was stuck deep into the canal’s bank.
The chairman of the Suez Canal Authority (SCA), Osama Rabie, told a news conference on Saturday that 9,000 tonnes of ballast water had been removed from the ship.
He said that the stern had begun to move on Friday night and that the rudder and propeller had started working again. Strong tides and winds had made freeing the ship more difficult, he added.
Mr Rabie could not say how soon the ship might be refloated but said the authority would “work around the clock” to get other ships through once the Ever Given was moved.
The SCA has brought in Netherlands-based Smit Salvage to help the effort. Peter Berdowski, chief executive of Smit’s parent company Boskalis, said on Friday that the bow was “really stuck in the sandy clay, but the stern has not been pushed totally into the clay, which is positive”.
“We can try to use that as leverage to pull it loose,” he told Dutch TV programme Nieuwsuur.
“We hope that a combination of the tugboats, dredging of sand at the bow and a high tide will enable us to get the ship loose.”
CAIRO (Reuters) – A huge container ship has run aground and is blocking traffic in the Suez Canal, one of the world’s busiest waterways and the shortest shipping route between Europe and Asia.
HOW DID THE SHIP GET STUCK?
The 400 metre-long Ever Given container ship ran aground early on March 23 as it travelled north from the Red Sea towards the Mediterranean, twisting diagonally across the width of the canal.
The principal causes were high winds and a sand storm that reduced visibility and rendered the ship unable to keep a straight course through the channel, according to the Suez Canal Authority (SCA). As the incident happened, stormy weather was buffeting Egypt, forcing the closure of several Mediterranean and Red Sea ports.
When ships enter the Suez Canal, they are boarded and steered through in convoys, with the help of one or two tugs. Occasionally they get stuck but are usually freed quickly with little impact on other shipping.
WHY HAS TRAFFIC BEEN HALTED?
The Ever Given is blocking the southernmost stretch of the canal which has a single lane, meaning no other ships can pass.
In 2015, Egypt opened a second lane for simultaneous two-way traffic on a 35 km (22 mile) stretch of the canal, but the extension lies further north, beyond an area where the canal widens into the Great Bitter Lake.
The SCA allowed a convoy of ships to enter the canal from its northern end at Port Said on March 24, hoping that the Ever Given would soon be freed, but the vessels have dropped anchor in a Great Bitter Lake waiting area.A map shows a traffic jam in the Suez Canal, Egypt March 25, 2021. Marine Traffic/Handout via REUTERS ATTENTION EDITORS – THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. MANDATORY CREDIT. NO RESALES. NO ARCHIVES.
Graphic: Suez blockade –
WHAT IS BEING DONE TO FREE THE SHIP?
At least eight tug boats, one with a towing power of 160 tons, have been trying to free the ship by pushing and pulling it away from the banks, with the help of the ship’s own winches.
Diggers have been clearing earth at the ship’s bow, which was buried in the canal’s eastern bank, and the SCA has deployed two dredgers.
Local maritime sources said ballast water, which is used to help stabilise ships, had been offloaded from the Ever Given amid efforts to refloat it.
WHAT ELSE COULD BE TRIED?
The ship’s owner has appointed two professional rescue teams from Dutch firm Smit Salvage and Japan’s Nippon Salvage to help “design a more effective plan” to refloat the Ever Given.
Martijn Schuttevaer, spokesman for Smit Salvage’s parent company Boskalis, said additional vessels could be deployed alongside the tugs, but a calculation would be needed on how much power could be used without damaging the container ship.
Further options include dredging underneath the ship and offloading containers, though shipping sources say removing cargo could be a lengthy and complex logistical operation given the size of the ship and its position.