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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] Hyundai Marine & Fire Insurance is estimated to have exposure of around KRW 10 billion in connection with the war risk insurance clause for the multipurpose vessel HMM Namu, which was involved in an explosion near the Strait of Hormuz.
According to financial industry sources on May 7, the vessel’s war risk insurance coverage totals $65.3 million (approximately KRW 100 billion), jointly underwritten by five major Korean non-life insurers. Hyundai Marine holds the largest share at 45%, followed by DB Insurance (20%), Samsung Fire & Marine Insurance (15%), Hanwha General Insurance (10%), and KB Insurance (10%). As the lead insurer, Hyundai Marine will oversee the investigation into the cause of the incident at Dubai Port.
For insurance claims under the war risk clause to be valid, the damage must result from war-related events, such as an attack, rather than internal defects. In the event of a total loss caused by war, the payout could reach up to KRW 100 billion.
Hyundai Marine’s gross liability would amount to $29.39 million (about KRW 42.5 billion), but with 75% reinsured, its net payout is estimated at approximately $7.35 million (around KRW 10.6 billion). Based on similar terms, DB Insurance would bear about KRW 4.7 billion, Samsung Fire & Marine KRW 3.5 billion, and Hanwha General Insurance and KB Insurance about KRW 2.4 billion each.
Korean Re is understood to have assumed 35% of the reinsurance portion. While details of retrocession are undisclosed, the total payout could reach up to approximately KRW 25 billion. The remaining risk is shared among global reinsurers, including Aon.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
