Marine Insurance Sector News

While the Covid-19 pandemic resulted in few direct claims for the marine insurance sector, the impact on the welfare of crews and the boom in shipping and port congestion, exacerbated by the Ukraine invasion, raises potential safety concerns.Demand for crew is currently high with the shipping boom, yet following the Covid-19 pandemic many skilled and experienced crew are leaving the industry, having endured many months, and in some cases, years, stuck on vessels. For those that choose to remain…

Speaking at the International Union of Marine Insurance (IUMI) annual conference, IUMI Data and Digitalization Forum Chair, Patrizia Kern discussed big data, the use of digital technologies, and how the COVID-19 pandemic has put digitalization on the fast track.“Digitalization is not an option anymore - it is here to stay - and the marine insurance sector needs to keep pace," said Kern. "For some time now, the shipping industry has been seeking cost-effective ways to operate and key logistics players have already begun to partner and digitalize the global marine supply chain.

Shipowners Claims Bureau, Inc. (SCB), the Manager of the American P&I Club, has recently announced a series of appointments designed to service the Club’s growing membership and help fulfil longer-term goals of continued expansion. The American Club has grown its membership substantially over recent years, tonnage having increased by some 25 percent over the past 24 months, and these appointments are intended to consolidate the Club’s continuing service capabilities in the future.The…

British ship insurer North is setting up a new European Union subsidiary in Dublin in case Britain loses access to the single market after Brexit, becoming the first of these specialised providers to announce such a move. Insurers are making contingency plans after Britain’s vote to leave the EU means they could risk losing “passporting” rights that allow UK financial services firms to trade in Europe without the need for locally regulated entities. Britain dominates the global marine insurance market and losing access to specialist Protection and Indemnity (P&I) clubs like North could weaken other parts of the country’s multi-billion pound shipping services sector.

Though water covers more than 70 percent of the Earth’s surface, businesses engaged in marine shipping operations and logistics, and other businesses that manufacture and ship product still have a lot of ground to cover getting their various goods to their final destinations. The ocean marine insurance market, the oldest insurance market in the world, was initially developed to protect these goods while crossing the ocean’s open waters, later to morph into a product to protect all international transportation regardless of mode.

Speaking at this year’s IUMI annual conference in Berlin, Nick Derrick, Chairman of IUMI’s Cargo Committee warned that large cargo losses were having a significant impact on the marine insurance sector. “Tianjin port covers an area of around 125 sq km”, says Derrick, “but only a small part of the port was affected by the explosion. Even so, we are expecting to see cargo losses of at least USD1.5 billion with some reports stating that the final figure could be as high as USD6 billion. Cargo insurers need to understand what the dollar loss might have been if the entire port had been affected, perhaps by a natural catastrophe such as an earthquake or tsunami”.

Explosions in the Chinese port of Tianjin last month would lead to cargo losses of at least $1.5 billion, and were having a "significant impact" on the marine insurance sector, a trade body said on Tuesday. "We are expecting to see cargo losses of at least $1.5 billion, with some reports stating that the final figure could be as high as $6 billion," Nick Derrick, chairman of the International Union of Marine Insurance's cargo committee, said in a statement. The incident should provide a "substantial wake-up call to all cargo insurers", he added. Reinsurance broker Guy Carpenter, a unit of Marsh & McLennan , said earlier this month that insurance losses for buildings, cargo, containers and property as a result of the explosions could total up to $3.3 billion.

The marine insurance sector is undergoing a rapid period of change and it is critical that insurers understand the risks the industry is facing and offer products that match these new trends, Dieter Berg, president of the International Union of Marine Insurance (IUMI) said. He outlined four new risks the industry is facing that insurers must endeavour to better understand. The first was cyber threats, thanks to the industry’s growing reliance on IT within shipping companies, ports & logistics and offshore. “Underwriters need a better understanding of these risks and must tailor their products to meet client needs,” he said. The second was Ultra Large Container Vessels…

The European Commission has opened formal proceedings to investigate whether certain provisions accompanying claim-sharing and joint-reinsurance agreements in the marine insurance sector might infringe European Union antitrust rules. The Commission fears that the provisions at stake in the agreements between the Protection & Indemnity Clubs (P&I Clubs) within the International Group of P&I Clubs (IG) may harm ship owners and the insurers that are not members of the IG. P&I Clubs are mutual non-profit making associations that provide Protection & Indemnity insurance - a type of direct marine insurance - to their members, the ship owners. The International Group of P&I Clubs (IG) is a worldwide association of thirteen P&I Clubs.

Insurance underwriters and average adjusters have welcomed the recent publication of BIMCO’s Standard General Average Absorption Clause. It is hoped that the initiative will help to promote a broad move away from declaring general average for small and uneconomic claims in all sectors of the industry. The Standard Absorption Clause is designed to be of benefit both to shipowners and insurers by avoiding the time and expense associated with pursuing small general average claims. The Clause is targeted for use in hull and machinery policies covering all types of vessels from container ships, bulk carriers, and tankers to cruise ships.