“It’s Not a Straight No Anymore”: Insuring Vessels in The Current State of The Red Sea Transit
Gulf Craft appoints a new CEO, Bahrain and Egypt announce new regulations for entry and exit.
When the global maritime industry was beset by the ongoing geopolitical tensions happening in the Red Sea and the Gulf of Aden, the ballooning insurance rates and security curtailed many yacht itineraries, which had to opt for the Cape of Good Hope reroute instead. As a result, maritime traffic in the region took a steep plunge, and it seemed as though the escalating turmoil would not be done with anytime soon. Fast forward to spring 2025, while the war is not over, maritime activity has started to pick up as of late, denoting a “new normal” in Red Sea transit levels. But what does this mean for the yachting sector? This month’s feature charts the aftermath of this crisis over a year later and what the future holds for the industry.
In addition, the news finds Gulf Craft (re)appointing a new CEO, while Bahrain and Egypt announced regulatory developments of their own.
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Faisal
Email: faisal@maritimeobserver.com
Bahrain Announces New Regulations for the Entry and Exit of Foreign Flagged Yachts
The Kingdom of Bahrain announced Edict 9 of 2025 to facilitate the smooth entry and exit of superyachts. The guide, issued in accordance with the Ministry of Interior, requires foreign-flagged leisure vessels to obtain a navigation permit from the Ministry’s Ports and Maritime Affairs Directorate prior to cruising Bahraini waters, obviating the need to work with a local shipping agent.
Gulf Craft Group Reappoints Erwin Bamps as CEO
In a homecoming of some sorts, UAE shipyard Gulf Craft has announced the return of Erwin Bamps as Chief Executive Officer as the builder continues it’s growth in international superyacht markets. Bamps succeeds Yannis Haidis, who was named CEO in August 2024 after Gulf Craft entered a new organizational structure, establishing Gulf Craft Group, a new umbrella organization encompassing the shipyard’s range of brands.
Foreign Commercial Yachts Now Permitted to Cruise Egyptian Waters Restriction-Free
In a significant development to Egypt’s superyacht tourism plans, foreign-flagged, commercially registered yachts are now permitted to cruise Egyptian waters restriction-free. The new edict, enforceable from May 2025 onwards, stipulates that the vessel’s maritime agent must supply local authorities with a confirmation, ensuring that no commercial activities will take place in Egyptian territorial waters for the duration of the stay.
Read more here.
“It’s Not a Straight No Anymore”: Insuring Vessels in The Current State of The Red Sea Transit
“The situation, at a high level, is that the market is not very keen on anything to do with the Red Sea at the moment,” said Mike Wimbridge, Managing Director at Pantaenius UK, back in July 2024. The situation, of course, refers to the escalating tensions and geopolitical strife that have permeated the Red Sea, sending the global maritime industry into complete disarray - when Houthi rebels started to threaten any vessel that made it’s way to Israeli ports, in a show of solidarity with Palestine following the 2023 war - and the superyacht sector was no exception. With traffic levels plummeting, due to the security risks imposed and, as a result, swelled insurance rates, owners have come to avoid undergoing the crossing from the Mediterranean to Asia altogether, opting for a protracted reroute through Africa’s Cape of Good Hope, which asks for an additional 3,500 miles to the trip, if needed. But in the year and a half since the crisis started, Wimbridge seems to be carrying a different tune on the sector's current state. Now, a perception seems to be taking hold that providing coverage for yachts wishing to transit the Red Sea may not be out of the realm of possibility as it once was. Despite the vagaries of the situation, this tremor of hope raises the question: Are owners ready to test Red Sea waters, or have yachting patterns been altered permanently?
Overview
The Red Sea - after 15 years of wrestling with security concerns due to the threat of Indian Ocean piracy - received a dose of optimism in late 2022, when it was decided that the High-Risk Area (HRA) categorization was going to be jettisoned by January 2023. Beside making the voyage simpler for yachts - using the Suez Canal to switch from summer to winter cruising seasons ever since the two-way route was introduced in 2015 - this decision coincided with an opportune time for the region’s superyacht market, where Saudi Arabia, Egypt, and neighbouring states have been establishing cruising grounds of their own, building the requisite infrastructure and updating regulations to accommodate the international superyacht fleet. Saudi Arabia’s NEOM and AMAALA projects promised a new future for winter itineraries, constructing state-of-the-art marinas and yacht clubs, and Egypt has continuously modernised legislation to facilitate the smooth entry and exit of foreign-flagged yachts. The prospects of the Middle East becoming a winter destination transcended beyond just a velleity.
The first change in weather, however, would arrive only a few short months later in December 2023, when Yemen’s Houthi militant group attacked 20 vessels transiting through the Bab-el-Mandeb Strait. A high-risk categorization followed in short order after the Joint War Committee (JWC) extended the designation to cover the southern Red Sea and Indian Ocean. Although the Houthis set their sights on shipping carriers, the yachting community felt the ripple effects.
What Did The Crisis Mean for Yachts?
“Pretty much no insurer would provide cover for Red Sea transit, so there were an awful lot of yachts going around Africa, or simply not going to the Gulf area at all,” said Wimbridge—a statement reflected in the year-to-year contrast of traffic levels in the Arabian Gulf. According to the Superyacht Times Gulf Superyacht Report, the number of superyachts 30 meters in length dropped to 198 in the first nine months of 2024, with insurance rates serving as the primary contributor to this decline. The Suez Canal, Egypt’s corridor that joins together Asian and European economies, felt this hit the most. “It had a direct effect on us”, said a prominent Egyptian agent in the Red Sea. “We used to record around 150 yachts passing through the Canal, and now, the whole season would see 40-50 yachts at most, even though it has nothing to do with us.”
“It affected us badly because the main problem is insurance, which basically went up 100%”, said Captain Steve Corbett of JLS Yachts, a superyacht agency operating in the Middle East and the Indian Ocean, and has processed over 100 entry/exit permits and 85 boat registrations in the region alone. “The problem is they get blanketed with the same tarnished brush. They don’t understand that the war bridge is actually South of Jeddah, where things possibly happen.” Although no attacks on pleasure vessels have been reported, the type of craft transiting has no effect on coverage provided. “It’s still up to insurance, they are just saying no, we are not going to cover you, and that’s the problem,” added Captain Corbett. And suppose an owner wishes to come down to the Red Sea. In that case, insurers stipulate a number of requirements, ranging from taking out specialist war risk insurance and paying premiums for crew members to deploying a security escort or maintaining communication with military personnel in the surrounding area.
The UAE, an established superyacht market, was not spared. “It has impacted [the sector] quite significantly, a good 40% decrease in the number of traffic coming into the UAE compared to pre-Houthi attacks on the Red Sea, said Mahmoud Itani, cofounder of consultancy firm IR Yachts and online marketplace YachtFinds.com.“The previous season, we used to record boats visiting the region at around 64, and after the Houthis' attack, numbers dropped to 38. They [superyachts] all opted for longer transit for safer passage, but some of them might not consider that as an option.” In fact, while a safer option, rerouting through the Cape of Good Hope, which, according to Itani, witnessed a 47 per cent rise in activity, is not a viable option for yachts below a certain segment. “When you are talking about a 50-60 meter boat, even though they might have the range, they will need to do alot of stops and if you look the West coast of Africa, there’s not really many ports that can accommodate such vessels for bunkering, provisioning and so on, so you would really need to have a large boat in order to do that crossing.”
In the case of the Emirates, it was not only about the dearth of boats coming in, but the ones that were berthed there. “Because of the Houthi attacks, there were a lot of boats that had to stay in the UAE, and for insurance reasons, they were not given the approval to go back,” said Itani. But in late April 2025, Itani pointed out a development in activity in the boats stationed in the UAE, “What we have noticed in the past five days is a surge in the number of boats that were located here in the UAE for the past two years are now making their way back to Europe. And they are going through the Suez Canal. There are signs of calmness, but people want to take the step because they want to use their boats in Europe.” Behind this sudden movement are the ceasefires and agreements made in the past several months, providing equal amounts of hope and frustration.
Rowing Back: Ceasefires
After a weak year of traffic all around, momentum started to pick up in January 2025, when a ceasefire was reached in Gaza. The Humanitarian Operations Coordination Center (HOCC) released a statement announcing that, save for “wholly-Israeli-owned” vessels, the Houthis are lifting the ban on vessels crossing the Red Sea and Gulf of Aden region. Although confidence was not fully restored and the situation remains mercurial, commercial traffic started to pick up in the ensuing months, when the Suez Canal saw 925 passings in March 2025. While positive for global trade, the uptick in activity on the commercial side can also have an effect on superyacht insurance rates, says Wimbridge: “If you are a really big insurance company, their marine department will be huge, and the yacht part of that department will be tiny. I think that it could be a consequence that when the commercial side settles down, the yachts will follow.”
Wimbridge, who cites the recent example of an owner who wished to take his yacht down to the Qatar Grand Prix later this month, cautioned that the industry is still not out of the woods as far as providing coverage goes. “I think things will calm down. At the moment, insurers can still charge a fairly hefty premium. On this particular boat, the premium could have been 4 or 5 million euros, for example.”
Could we expect rates to go down eventually? “For the transit, yes, they will. But it's for a limited number of people. I see a downward trend with that,” says Wimbridge, who ponders whether that would be sufficient to see transit activity reach pre-crisis levels. “Whether enough people will want to do so, I don’t know.”
Putting insurance aside, many owners may still feel apprehensive about returning to their default cruising routes. With all the developments that have transpired since early 2024, is there the same level of hesitancy as there once was? “Probably a little less hesitancy,” said Wade Alarie, moderator of the Red Sea Passage Facebook group, where a community of cruisers congregate to exchange advice and plans. “Of those people, I estimate that 15% are still dissuaded, and are either stalling, redirecting, or shipping - in order to bypass the risk.”
Alarie recounts the case of one cruiser stopping at Yemen’s Port Al Mukala last year. The agent, helping the cruiser with fuel and port assistance, claims that “the Houthies were not interested in targeting private yachts.” Although the threat of harm to any carrier will always be present, understanding the motives behind the attacks may be instructive. “Private vessels were not targeted because they did not pose a significant threat,” said Itani, crystallising that a superyacht won’t aid the economic disruption the Houthis aim to achieve."The attacks were very targeted in the sense that they were either oil or commercial. They wanted to impact a large segment. Hitting a yacht or a boat would not make any big difference, it’s like a waste of money.”
The Diagnosis: Is it Permanent Damage?
That owners would decide to return to the Red Sea is best read as an indicator of the long-term implications of this crisis for yachting patterns. “This is definitely a short-term implication which will be resumed as soon as the situation calms down even more,” said Itani, who emphasizes that activity won’t return to usual numbers overnight. “I think while traffic may gradually return as confidence rebuilds, a complete reversion to the previous patterns will not be likely in the near term.” Captain Corbett, while agreeing with this assessment, is pinning his hopes on the upcoming Monaco Yacht Show this September to encourage a return of superyacht traffic. “No, they will definitely take the Suez Canal. And what we’re expecting now is, if the war stops by the time Monaco comes up, I think we will get a flood of boats that have been waiting, but it’s all to do with insurance.”
From the insights shared by all the experts canvassed for this piece, one clear answer emerged: At present, the situation remains volatile, and uncertainty is the only certainty, but taking a page out of the larger maritime sector: acclimating to the current circumstances instead of waiting for tensions to evaporate seems to be the way forward. “I would say this is a shift to a 'new normal’, where the threat is there, but the actual risk to private vessels is LOW.” said Alarie. Whether superyachts populate the Red Sea waters remains to be seen, but to quote Wimbrige: “At least it’s doable now rather than a straight no as it was before.”