"So it is easier to say that the war risk premium
has increased between $30 and $60 per container, which varies with freight handlers."
Bargain, if you can cover the war risk premium
," said a Singapore-based marine fuels trader for a large commodities merchant.
India's oil refiners sourcing crude from conflict-prone West Asia, are facing freight increases of as much as $300,000 per day, after global marine insurers imposed an additional war risk premium
of 0.35 per cent to 0.40 per cent of the value of the ship, for every transit through the Strait of Hormuz - the world's busiest oil shipping lane - in the wake of recent attacks on oil tankers.
Summary: One broker expects a war risk premium
but doesn't expect it to have a big impact
Already, we are paying huge war risk premiums
in terms of insurance, and we are currently the highest payees of war risk premium
all over the world because of the dangers already attached to our own territorial waters.
Crude Oil raced higher with Brent and WTI showing healthy gains in the week on the potential for war risk premium
. Crude Oil remains vulnerable to this as economic fundamentals that control the price remain negative.
Nevertheless, market valuations as reflected in the S&P 500 index are 30 percent below fair value benchmarked against the 10-year bond yield, reflecting a rather large war risk premium
. This risk premium appeared during the harrowing debates of 2002 over the impending Iraq war, and the market has not been able to shake it off ever since.
This was necessary, as Pakistani exporters had already suffered on account of appreciating Rupee (6.6 per cent during July-May FY02), loss of traditional markets, and the imposition of a war risk premium
on transportation cost following September 11, incident, had the SBP not supported the Dollar, the parity would have appreciated further.
Since the Gulf of Aden was classified as a war risk area by the Lloyd's Market Association (LMA) in May 2008, the cost of war risk premiums
has increased significantly, from $500 per ship, per voyage to up to $150,000 per ship, per voyage, in 2010.
a report by the ratings agency am Best also predicted a surge in war risk premiums
by insurers due to losses from global conflicts.
Given the size of the property and casualty insurance industry's policyholder's surplus of about $505 billion, as of June 2008, and the relatively low total cost of vessel hull and war risk premiums
of approximately $350 million and total cargo premiums written by U.S.
carriers), airlines would be paying a staggering $1.4+ billion in additional war risk premiums
on top of the $900 million+ we are already facing.