Insurance Perspective News

Rising average temperatures are melting ice; the call goes out for heavy fuel oil to be regulated in Arctic. The Arctic is thawing even faster than lawmakers can formulate new rules to prevent the environmental threat of heavy fuel oil pollution from ships plying an increasingly popular trade route. Average Arctic temperatures are rising twice as fast as elsewhere in the world and the polar ice cap's permanent cover is shrinking at a rate of around 10 percent per decade. By the end of this century, summers in the Arctic could be free of ice. As the ice melts, traffic of ships carrying cargoes of gas, coal and diesel through the region has increased. Russia, in particular, is keen to expand shipping through the Arctic given its rich natural resources and efforts to cut costs.

An interview with Rich Hobbie, the leader of the Water Quality Insurance Syndicate (WQIS), the largest underwriter of pollution liability insurance for marine vessels in the United States. Can you give our readers an overview of your business today. The Premium income and growth factors in the marine insurance industry are very stagnant right now. And competition is quite heavy in all areas. In the U.S. market and in the marine market in general, there are new players. The London market has gotten more aggressive over here.

Construction is a complex business. Equipment can break down; employees can be injured; a project can go awry in unexpected ways. Add a marine element to the work underway, and the pitfalls that a contractor must navigate to manage risk become even more challenging. Marine contractors have long understood that they need specialized coverage and have sought out ocean marine insurance carriers with the expertise to help them. Each project they bid on, however, can come with a variety of special requirements.

The region’s premier maritime event for specialized vessels opening Monday, 5 October 2009, is shrugging off the impact of the economic downturn with a 70% increase in the number of exhibitors and a 60% increase in exhibition space compared with last year, according to the organizers. Workboats include tugs, ferries, supply vessels; police, fire, patrol, pilot, rescue and oil spill boats; along with, dredgers, barges and floating cranes. More than 2,000 such vessels are estimated to be docked or repaired in the Middle East.

The roll call of countries and regions now declaring themselves in recession keeps growing, and credible economists around the world offer little hope for relief in the short term. While the impact of the economic turmoil on financial institutions and on global credit liquidity has been written about exhaustively, the impact is now spreading far beyond the Wall Street world, touching businesses that until recently were healthy and growing. For both the marine industry and the insurers who partner with them to protect shipping, the recession threatens an abrupt halt to the unprecedented boom times of recent years. While key indicators of marine industry prosperity are eroding…