FIGURES compiled by website confused.com suggest the average cost of car insurance in the UK is now £719 a year.

Convert that to US dollars and the outlay is $968. By neat coincidence that is almost exactly the same as the all-in daily cost of insuring a very large crude carrier, which currently sits at $982, according to new numbers published by the Baltic Investor Indices.

While we are comparing apples to oranges here, it may even be argued that shipowners are receiving a better deal than British motorists. Insurance typically makes up 20%-27% of what you pay to keep your vehicle on the road, but only somewhere between 2%-10% of a shipowner’s operating expenses.

On the other hand, drivers are spending 1% more than they did three months ago. VLCC operators, by contrast, have watched the price of their policies increase by 8% in the past quarter.

As Lloyd’s List reports, it’s not all bad news for our industry. The BII data — which takes in hull & machinery, protection & indemnity, war risk and a whole raft of ancillary classes — shows that premiums are still softening for many vessel types, including suezmaxes and bulk carriers.

Even so, quotes for what the public call “supertankers” are at their highest since 2024, with bills for LNG and LPG carriers also picking up sharply in recent months. Why could that be?

The BII statistics come in the form of a bare spreadsheet with no additional commentary, so no reasoning is provided. But the most obvious explanation is that crude and gas tankers are particularly vulnerable to the elevated rates being sought by marine underwriters for calls to the Middle East.

These reflect the elevated risk perception since the US and Israel went to war with Iran in late February. As Lloyd’s List noted last month, premium demands for Strait of Hormuz transits generally sit in the 7.5% to 10% of hull value bracket and more.

With newbuilding VLCCs currently valued at $130m and existing VLCCs worth even more, the price tag for the high-risk trip will exceed $10m in many cases.

That is, in short, a lot.

David Osler
Law and marine insurance editor, Lloyd’s List 

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