The London-based insurance Lloyd's has removed its war risk rating for merchant ships using the Straits of Malacca, local media reported Wednesday.

In letter dated Monday to the Malaysian Transport Ministry, the Lloyd's Market Association's Joint War Committee (JWC) said it has decided to delete the Straits of Malacca from its list of 20 areas worldwide deemed security threats to shipping.

This lift of war-risk rating is expected to reduce insurance premiums on ships plying one of the world's busiest waterways.

Malaysian Transport Minister Chan Kong Choy on Tuesday welcomed Lloyd's move, saying it will help improve the image of Malaysia in the international community and contribute to the tourism and trade sector in this country.

In June 2005, Lloyd's decided to put the Straits of Malacca on the list. The three littoral states -- Malaysia, Indonesia and Singapore -- had been urging the insurance association to remove the rating, saying it reflected poorly on the region's security situation.

Chan said the three countries will continue to safeguard the security of the Straits of Malacca to ensure it will not be labeled with war-risk rating once again in the future.

Source: Xinhua