Photo 269534952 © Vetre Antanaviciute-meskauskiene | Dreamstime.com

Logistics operators moving aid into Syria following last month’s earthquake have slammed insurance companies, claiming they are profiteering from tragedy.

An executive of an airline at the forefront of the aid effort told The Loadstar it always expected to pay a premium for delivering to sanctioned countries, but insurance companies were taking advantage of the situation.

“Since sanctions were imposed on Syria, insurers have added what they call a ‘war premium’ of $10,000 per flight into the country,” the executive said.

“Premiums on sanctioned countries typically come in at around $2,000 to $5,000; $10,000 is way above that and, with the surge in demand that followed the earthquake, we were being quoted $50,000 or more for insurance.”

Industry insiders said some carriers had been quoted $60,000, with the airline executive adding that “no cost” had been applied to services to Turkey.

Despite numerous requests, The Loadstar got no response from the insurance sector, other than representative for the Global Federation of Insurance Associations who said: “No comment.”

Asked if insurance companies had tried to justify the huge premiums, the airline executive said: “They didn’t. Sanctions had resulted in few carriers servicing Syria. Suddenly there is an emergency and interest in flying to Syria, but insurers made us jump through hoops for cover. It took about 10 days and then they hit us with the cost.

“It meant aid was not being delivered in a timely manner, and when we pass the cost onto the customer or agency chartering the aircraft, this reduces the level of aid that can be afforded.”

As a result, humanitarian agencies are flying relief goods into Lebanon and Turkey to avoid the premiums, leading to delivery delays and spoilage.

The executive acknowledged that insurers had their own “hoops to clear” as a consequence of the sanctions, which require financial institutions to prove what they are doing could not be seen to benefit the sanctioned country.

“This means having to prove their customers are not affiliated to the Syrian government, that it was humanitarian cargo and Syrian fuel would not be used.

“And then there are real security risks at both Aleppo and Damascus airports, which would have been instrumental in the insurance companies’ deliberations.”

Government and humanitarian services director at Air Charter Service Ben Dinsdale said: “Many airlines are unable to fly to Syria due to the war and, indeed, during the relief operation there were missile strikes on a suburb of Damascus and on Aleppo Airport. These incidents would have reinforced the risk to the insurance companies. In my opinion, it was no surprise that the war-risk insurance premiums were on the high side.”

Comment on this article

You must be logged in to post a comment.