The 2027 Nordic Marine Insurance Plan introduces significant changes, enhancing coverage while addressing geopolitical risks and compliance challenges.
As we move towards 2027, international marine machinery insurance markets continue to maintain their competitive nature, and an excess capacity in the markets persists. According to CEFOR data, the increase in loss frequencies observed in the first six months of 2026 cannot be prevented by the competitive situation created due to the excess capacity in comparison to 2024 and 2025. The positive aspect is that there has been no increase in total loss claims.
Significant increases have been observed in both loss frequency and loss costs, particularly in machinery damages. An environment where repair, labor, and spare parts costs are continuously rising negatively affects the compensation for damages. The high average age of vessels worldwide is seen as a primary reason for the high levels of machinery damages.
The geopolitical and political tensions in regions such as the Red Sea, the Strait of Hormuz, and the Black Sea create risks that have serious negative consequences both for insurance and for the safety and health of seafarers. The sanctions and political disputes in these regions also raise tensions between the insured, insurers, carriers, and the insured parties, leading to extraordinary practices.
After a brief overview of the insurance and maritime environment, let us take a look at the main changes made to the Scandinavian insurance rules on October 1, 2026. The Nordic Marine Insurance Plan (NMIP), known as the Scandinavian Insurance Terms, has come into effect with a new series of interpretations in favor of the insured, marking the implementation of Nordic Marine Insurance 2023's 2027 version.
The NMIP consists of a series of insurance rules that have no equivalent in the world, determined by the discussions and agreements of insurers (CEFOR) and shipowners (Norwegian, Swedish, Danish, and Finnish Shipowners' Associations). Its first application was in 1871, and it has continued to adapt to current conditions and renew itself to this day.
One of the most significant aspects of the new version is seen in the War Hull and Loss of Hire insurance. As a result of current war conditions and the risks they create, it has become possible for a ship to be insured under NMIP terms for economic damages incurred due to its inability to carry out commercial voyages without being officially blocked, seized, or exposed to physical damage, or due to delays in these voyages. Examples of such events include restrictions on navigation routes during wartime, changes, political interventions, the closure of ports, or limited openings for trade, as well as threats currently on the agenda regarding security. In other words, insurers will now evaluate and decide on the reasons for a ship's absence from commercial use from a more favorable perspective for the insured.
Additionally, in terms of sanctions and compliance laws, the position of insurers has been strengthened, and the obligations of the insured in this regard have been significantly increased. The insured's obligation to exercise due diligence regarding sanctions has become an indispensable condition of the insurance. The insured must confirm that they will not facilitate money laundering activities before and throughout the entire policy period, will not engage in attempts to support terrorism, and will comply with sanctions. The failure to meet any of these conditions means that the insurance policy will be deemed invalid.
Other important changes in the 2027 version can be listed as follows:
Clause 1-4A, 1-4B, and 1-4C regarding dispute resolution and arbitration.
In NMIP 2013, the governing law and courts applicable to dispute resolution were addressed under a single heading in Clause 1-4A, and arbitration solutions were handled under a separate and optional clause. In NMIP 2027, Law, Courts, and Arbitration are evaluated separately and independently under Clauses 1-4A, 1-4B, and 1-4C. When parties prefer to resolve disputes through arbitration, the arbitration authority has been exclusively assigned to the Nordic Offshore and Maritime Arbitration Association (NOMA).
Clause 15-11, 15-17 Total Loss Blocking Trapping
The new version has further expanded the concept of Total Loss arising from classical war perils described in 2-9 (1) and states that in cases where a ship is deprived of use for at least 12 months due to war perils, foreign interventions, terrorism, and any violence motivated by political reasons, the insured can declare Total Loss.
The new version also clarifies and broadens the concept of Blocking and Trapping, stating that if threats created by war perils prevent a ship from leaving the port, it can be interpreted as total loss, regardless of whether the blocking or seizure has caused physical damage.
Clause 15-17 Loss of Hire (LOH)
In the old version, for a risk to fall under LOH coverage, it was necessary for the ship to be deprived of movement due to a physical blockage covered by H&M insurance. NMIP 2027 has expanded this scope by stating:
Whether or not the blockage has caused physical damage, if a ship's movement from the restrictive area it is in occurs due to a threat arising from classical war perils or foreign interventions as specified in Clause 2-9 (1) (a), the insured has the right to notify damage under LOH coverage. To avoid any misunderstanding, I would like to emphasize a crucial point here. The mentioned threat must be urgent, unavoidable, specific, and decisive. Additionally, this is not a general Rule, and each case will be evaluated individually.
As can be understood from the topics mentioned above, the ongoing wars in the Middle East and the Black Sea have prompted Scandinavian insurers to take action and make a series of changes in marine insurance, particularly in the War Risks section, in favor of the insured to adapt to the geopolitical conditions of the day.
Although some arrangements are being made in the insurance terms in favor of the insured, the sanctions, compliance laws, and due diligence obligations continue to be a nightmare for both insurers and the insured. Due to the efforts to track changing sanctions and comply with them, we have become unable to fulfill our noble duties such as transportation, insurance, and banking. As the EU countries, the United Kingdom, and the United States impose these arbitrary sanctions and assign us insurers and bankers the role of enforcers, this burden seems likely to continue for some time.
Source: SeaNews Türkiye
