Lee made the remarks during a meeting with shipping companies, policy lenders and insurers in Seoul, the fourth in a series of industry-finance meetings aimed at supporting sectors hit by the Middle East conflict.
“The high and prolonged waves triggered by the Middle East war are increasing the management burden on shipping companies through higher operating costs, including fuel expenses, and opportunity costs from route restrictions,” Lee said.
He said smaller shipping firms could face difficulties securing insurance for their vessels’ safe return, as marine insurance for large and special risks depends heavily on overseas reinsurers.
Under the support plan, 10 domestic nonlife insurers will jointly underwrite war-risk insurance for the vessels without relying on overseas reinsurance. The participating insurers include Hyundai Marine & Fire Insurance, Samsung Fire & Marine Insurance, Meritz Fire & Marine Insurance, KB Insurance and Hanwha General Insurance.
The coverage is expected to total about 300 billion won ($200 million) based on the value of the vessels subject to the insurance.
The FSC said the insurance will be offered at the lowest rate available among domestic shipping companies, including large carriers. If a lower rate is later applied to another Korean vessel after the contracts are signed, the same rate will be applied retroactively through measures such as premium refunds.
The support measure takes effect immediately.
Lee also said the FSC will review, in consultation with relevant ministries, ways to establish a standing reinsurance program to expand coverage to major vessels with significant impact on the national economy.
Regarding Namu, a midsized bulk carrier operated by HMM that caught fire after an external attack, Lee urged insurers to swiftly proceed with related procedures so that reasonable compensation can be provided.
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