Oil trade ban between Europe and Iran taking toll on Ship Insurance

In the past few years, Americans have had a really hard time coping with the rising gas prices and the relationship with their pocketbook. The question still presides, what’s going on with the government and the Middle East to make the cost of oil such a predicament. In Europe, this year, complications have gotten that much worse.

A ban that has been developing since July now prohibits all Iranian oil into the European Union and prohibits European insurers from working with any ship carrying Iranian oil anywhere in the world, according to Reuters.

London is the world leader in marine insurance, controlling 17% of the market.  This ban obviously won’t stop those ship-owners involved in the trade from switching to insurance elsewhere but the process will cause quite the loss in premiums and migration to other markets. Ultimately, and the reason for this agreement between the Iranian sanctions and EU, is to put pressure of the Tehran’s for the disputed nuclear program by shutting off the country’s main source of foreign income.

In the midst of this situation, came the biggest marine insurance claims in history due to the Costa Concordia shipwreck earlier this month off the coast of Italy. Insurance claims from the wreck are now estimated to be up to $1 billion.Analysts positively claim, though, that they see China and India picking up the slack as the new emerging force behind marine insurance and most international ship-owners carrying on with their business, still continuing a decent return on investment.

MHG Insurance Brokers provide insurance plans designed specifically to meet the needs of marine officers, crew and contractors, expatriates, and US residents. MHG also offers yacht crew insurance, international medical insurance, disability insurance ,long term care, life insurance and business insurance. Our staff applies years of industry knowledge to find the best plan for each individual client, and is always a phone call or email away to answer any questions. For more information, contact MHG today.

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2. Costa Concordia Losses Could Reach $1 Billion, May Be Worst Marine Loss in History