With the Strait of Hormuz closed by the Middle East war, the size of Korea's exposure to marine insurance risk has been identified at about 1.7 trillion won. Premium rates also appear to have risen to five to ten times their previous levels.
According to data submitted by the Financial Supervisory Service to the office of Kang Min-kuk of the People Power Party on the 15th, as of the 9th, domestic insurers' retained amount in marine insurance totaled 1.6863 trillion won across 10 insurers and two reinsurers. Of that, primary insurers held 1.4619 trillion won and reinsurers 224.4 billion won. As a rule, ship or cargo insurance is jointly underwritten by multiple insurers, then reinsured to disperse risk.
By category, hull (ship) insurance is 979.6 billion won and cargo insurance is 706.7 billion won. Samsung Fire & Marine Insurance holds the most at a total of 427.2 billion won, combining hull (295 billion won) and cargo (132.2 billion won). It was followed by KB Insurance with 332.8 billion won (hull 32.4 billion won, cargo 300.4 billion won) and Hyundai Marine & Fire Insurance with 284.3 billion won (hull 242.8 billion won, cargo 41.5 billion won). Of the hull insurance, about 222.1 billion won was assumed by the reinsurer Korean Reinsurance Company.
Premium rates in the war risk policy terms applied to vessels staying in Middle Eastern waters due to the closure of the Strait of Hormuz are also surging. Hull insurance premium rates, typically around 0.25%, have reportedly risen to 1% to 3% since the war. For a war endorsement that covers war risks, when war breaks out, insurers or reinsurers cancel existing contracts within 72 hours and re-contract at premium rates reflecting war risk. As a result, actual policyholders such as shipowners or cargo owners may face a heavier burden than insurers.