Given the events of 2012, the choice of ‘Marine Insurance – building resilience and defining a sustainable future’ as the common theme for the IUMI annual conference could not have been more apt.
The Costa Concordia was the biggest single casualty loss in history for the marine insurance market and Superstorm Sandy at an estimated cost of $2bn to $2.5bn delivered the biggest combined event loss ever for marine underwriters industry. However, the insurance market has shown its resilience to deal with these losses but the market has to look to the future and the changing needs of its clients.
The ability to adapt and satisfy the apparent and future needs of our clients remains a real challenge. Underwriters must be close to those we are serving and not only provide a financial risk relief instrument. A part of the package must be a genuine risk management component where insurers actively put their professional, hard earned and often expensive knowledge and expertise to use. Insurers must learn to apply their claim history to broaden the scope of what insurers can do and not use it as an excuse to put limits on our willingness to respond to new opportunities and risks.
The Costa Concordia loss and the loss of the MV Rena off the coast of New Zealand have opened up a debate within the industry over the cost of removal of wreck with the reinsurers driving the debate over whether there needs to be limits placed on liability for wreck removal.
This has come into sharper focus with the new breed of 18,000 TEU container vessels that have come into service with more and even larger vessels already in the world’s order books. They will present a challenge to the market in terms of risk accumulation and the problems of salvage should they be involved in a future incident or loss.
There are other issues that IUMI is seeking to address with the relevant authorities, regulators and the wider maritime community. Last year it formed a political forum to deliver a focused approach to the major issues and has worked on a number of fronts. There are three issues which while having been on the agenda still seriously affect insurers’ business.
Firstly is the safety of container ships and container ships’ cargo. The loss of the MSC Flaminia in 2012 and the loss of MOL Comfort earlier in 2013 have raised a series of questions for insurers. These include:
Concerns over the contents of and the correct declaration of the weight of containers;
The refusal of many ports of offer refuge;
The ability to fire-fight on major container vessel.
Secondly there remains the problem of piracy. There is a fundamental shift currently going on. On the positive side of the coin, there is currently less piracy activity in the Gulf of Aden and the Indian Ocean – thanks to naval forces being present, the use of armed guards being generally accepted by all marine transportation industry stakeholders, which was supported by IUMI very early on, and the attempts to establish an administration in Somalia.
The Costa Concordia was the biggest single casualty loss in history for the marine insurance market and Superstorm Sandy at an estimated cost of $2bn to $2.5bn delivered the biggest combined event loss ever for marine underwriters industry. However, the insurance market has shown its resilience to deal with these losses but the market has to look to the future and the changing needs of its clients.
The ability to adapt and satisfy the apparent and future needs of our clients remains a real challenge. Underwriters must be close to those we are serving and not only provide a financial risk relief instrument. A part of the package must be a genuine risk management component where insurers actively put their professional, hard earned and often expensive knowledge and expertise to use. Insurers must learn to apply their claim history to broaden the scope of what insurers can do and not use it as an excuse to put limits on our willingness to respond to new opportunities and risks.
The Costa Concordia loss and the loss of the MV Rena off the coast of New Zealand have opened up a debate within the industry over the cost of removal of wreck with the reinsurers driving the debate over whether there needs to be limits placed on liability for wreck removal.
This has come into sharper focus with the new breed of 18,000 TEU container vessels that have come into service with more and even larger vessels already in the world’s order books. They will present a challenge to the market in terms of risk accumulation and the problems of salvage should they be involved in a future incident or loss.
There are other issues that IUMI is seeking to address with the relevant authorities, regulators and the wider maritime community. Last year it formed a political forum to deliver a focused approach to the major issues and has worked on a number of fronts. There are three issues which while having been on the agenda still seriously affect insurers’ business.
Firstly is the safety of container ships and container ships’ cargo. The loss of the MSC Flaminia in 2012 and the loss of MOL Comfort earlier in 2013 have raised a series of questions for insurers. These include:
Concerns over the contents of and the correct declaration of the weight of containers;
The refusal of many ports of offer refuge;
The ability to fire-fight on major container vessel.
Secondly there remains the problem of piracy. There is a fundamental shift currently going on. On the positive side of the coin, there is currently less piracy activity in the Gulf of Aden and the Indian Ocean – thanks to naval forces being present, the use of armed guards being generally accepted by all marine transportation industry stakeholders, which was supported by IUMI very early on, and the attempts to establish an administration in Somalia.