War Risk Insurers List Mozambique Channel as Area of Elevated Hazard

The coastline of Mozambique’s Cabo Delgado province has been designated as a “Listed Area,” according to a recent decision published in the Joint War Committee Circular (JWLA-026 and 027) by Lloyd’s and the International Underwriting Association (IUA). This means that shipowners will be required to notify their underwriters of voyages in this area.

The listed area comprises waters within 50 miles of Mozambique and Tanzania, to the north at Mnazi bay and to the south at Bai’a do Lu’rio.

Insurance costs for vessels plying this route are expected to rise as tensions run high due to an Islamist insurgency in Cabo Delgado province.

The listing comes days after French energy company Total declared force majeure on its $20 billion LNG project in Cabo Delgado. It has begun to withdraw all staff working at the site following a deadly insurgent attack in the nearby town of Palma. The force majeure declaration allows Total not to fulfill contractual obligations with its counterparties for the period of its validity.

Cabo Delgado, one of Mozambique’s poorest provinces, has been rocked by insurgency led by an Islamic faction referred to as Ansar-Al-Sunna. In the span of two years, the group’s operational capabilities and reach have grown, threatening billions of dollars’ worth of offshore gas development and shipping activities along the Mozambique Channel.