Eo Ik-yeon, chairman of the Financial Services Commission, announced on May 21 during a meeting with the shipping industry, policy finance institutions, and the insurance sector in Jongno, Seoul, that "domestic insurers will take responsibility for the return of the ten vessels from small and medium-sized shipping companies in the Hormuz Strait."
He noted, "Given the nature of marine insurance, there is an unavoidable reliance on overseas reinsurers. This can create challenges for small and medium-sized shipping companies, which may struggle to secure insurance to return home safely due to their limited negotiating power."
The support involves a risk-sharing arrangement among ten domestic non-life insurers, including Hyundai Marine & Fire Insurance, Samsung Fire & Marine Insurance, Meritz Fire & Marine Insurance, KB Insurance, and Hanwha General Insurance. Korean Re, a domestic reinsurer, will also participate. Previously, high reliance on overseas reinsurers raised concerns about soaring premiums or denial of coverage amid escalating war risks in the Middle East.
To alleviate the burden of higher premiums faced by small and medium-sized shipping companies compared to larger firms, the Financial Services Commission decided to apply the lowest rates adopted by domestic insurers.
The support targets the ten vessels currently waiting in the Hormuz Strait. Larger shipping companies were excluded due to their stronger negotiating power and the capacity of domestic insurers. The government plans to continue providing additional support within this framework if the conflict prolongs.
The support measures will take effect immediately.
Additionally, the Financial Services Commission urged insurers to expedite the relevant procedures to ensure appropriate compensation for the HMM-operated small bulk carrier Namoo, which experienced a fire incident while waiting in the Hormuz Strait on May 4.
* This article has been translated by AI.
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