Hyundai Marine & Fire Insurance has an exposure of approximately 10 billion won ($7.3 million) tied to the war risk coverage on the multipurpose vessel "HMM Namu," which suffered an explosion while anchored near the Strait of Hormuz in Iran.
According to financial industry sources Tuesday, the war risk coverage on the HMM Namu amounts to $65.3 million (about 100 billion won), jointly underwritten by five major Korean non-life insurers. Hyundai Marine holds the largest share at 45%, followed by DB Insurance at 20%, Samsung Fire & Marine Insurance at 15%, Hanwha General Insurance at 10% and KB Insurance at 10%. As the lead underwriter with the largest stake, Hyundai Marine will oversee the investigation into the cause of the incident on the HMM Namu at the Port of Dubai.
For the HMM Namu to receive an insurance payout under the war risk coverage, the damage must result from war-related causes such as an attack, not from a vessel defect. If the ship is declared a total loss due to the incident, the insurance payout could reach up to 100 billion won. In that scenario, Hyundai Marine would be liable for $29.385 million (about 42.5 billion won), but having ceded 75% to reinsurers, it would only need to pay $7.35 million (about 10.6 billion won). Applying the same ratio, DB Insurance would pay 4.7 billion won, Samsung Fire 3.5 billion won, and Hanwha General Insurance and KB Insurance 2.4 billion won each.
Korean Re is assuming 35% of the reinsurance on the HMM Namu war risk coverage. The scale of its retrocession has not been disclosed, but given the total size of the coverage, it is estimated that Korean Re may have to pay up to 25 billion won. The remaining risk is shared by global reinsurers including Aon. "If it is confirmed as a total loss, an insurance payout of up to 100 billion won could be made," an insurance industry official said. "It will likely take a considerable amount of time to assess the damages."
