Insurers up against the challenges of marine transport
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Today, marine transport insurance is no longer confined to the traditional risks affecting people, ships and goods. It also covers new risks generated by geopolitics, climate change, the interconnection of the global economy and crime.
Among this multitude of risks, insurers and reinsurers are particularly concerned by the accumulation of insured values in one place or on a single vessel. The race to build gigantic port facilities, giant container ships and cruise liners carrying thousands of people is posing problems for the industry in terms of capacity, risk assessment, rating and management. For instance and according to a catastrophe scenario drawn up by insurer Allianz, the collision of a mega-container ship and a large cruise liner in an environmentally sensitive area, resulting in the loss of both vessels, is likely to generate a loss of 4 billion USD.
According to IUMI, the International Union for Marine Insurance, the value of cargo handled in one day by the Port of Shanghai could reach 1.6 billion USD. Moreover IUMI estimates that the insured value of a container ship increased by 35% in 2021 alone.
For the record, the explosion in the port of Tianjin (China) in August 2015 had caused damage estimated at over 3.5 billion USD, disrupting the global supply chain and causing production stoppages in every corner of the globe.
Insurers need to be responsive not only to the gigantic scale of the risks insured, but also to the effects of climate change, maritime piracy and the consequences of the growing use of digital technologies on ships and in port squares. This is why it is absolutely essential to establish a permanent watch and instill risk culture.
