Finance Minister Abraham Hirchson decided that the Israeli government through Inbal Insurance Co and the Tax Authority would issue marine transport insurance policies
Israel’s state-owned Inbal Insurance Co. Ltd is offering to insure vessels coming to Israel for direct damages, in an effort to ease significantly increased costs for shipping due to the security-related events in Northern Israel.
The decision followed pressure of the Israeli Shippers Council who called upon the government to step in, in order to ease the high costs of the war surcharge levied by the shipping companies. War risk insurance rates charged from ships reaching Israeli shores had risen significantly due to the security situation in recent weeks.
Finance Minister Abraham Hirchson decided shortly after the break of hostilities that the Israeli government, through the Inbal Insurance Co and the Tax Authority, would issue marine transport insurance policies. Last week we reported that estimates made by Israel's Shippers Council showed that the damage to the economy caused by the extremely high war risk surcharges was at least US$15 millions per month, (NIS 70 millions) compared to US$ 800,000 per month before the war.
Mr. Gad Shaefer, chairman of the council, noted that the estimates were made for the container trade only and suggested that the government will have to step in and declare it would insure vessels calling at Israeli ports.
The ISC made it clear to the government that in recent years shipping companies had charged US$9 per TEU / US$18 FEU as war risk surcharge. This was increased to US$115 – 220 per TEU / US$440 per FEU.
Shaefer also noted that based on 2005 container figures, on average each TEU pays US$175, thus if we assume that each day some 3,500 containers move through the ports the total daily damage to the economy was over US$600,000. Following Inbal's announcement the ISC expressed hopes that all shipping companies would reduce the level of war risk surcharge.
