Bharat Virmani
Member, IUMI Legal and Liability Committee
Vertical Head Marine Underwriting, Bajaj Allianz General Insurance Company
Attending IUMI’s spring session was a wonderful experience. A superb workshop, with lots of important maritime and global marine insurance issues were discussed and deliberated during the committee discussions amongst the members.
Post COVID, economy recoveries and hardening of global marine insurance led to a growing premium and strong underwriting results for marine insurers globally. After a 3.0% expansion in 2022, world’s real GDP is projected to increase 2.0% & 2.9% in 2023 and 2024 respectively. While Western Europe and North America are still expected to experience mild setbacks in early 2023, recession risks have diminished. Resilience in the emerging markets of Asia Pacific, the Middle East, and Africa will keep the global economy moving forward in 2023, albeit at a slower pace than 2022. In response to a retreat in commodity prices, softening demand, and improving supply conditions, S&P Global Market Intelligence economists expect global consumer price inflation to moderate from 7.6% in 2022 to 5.3% in 2023 and 3.2% in 2024.
Russia/Ukraine conflict, being one of the most talked about topic, war and sanctions are one of the major challenges and uncertainties being faced by the global marine insurance market today. New war exclusions e.g., Five Power War exclusion (NATO), RUB (Russia Ukraine Belarus) are being imposed in various hull and cargo insurance programs. CTL’s arising from Ukraine is also a cause of concern for marine insurers.
Social inflation, ESG, sustainability of alternate fuels (life cycle), decarbonization (new fuels = new risks), lithium-ion vehicle transportation issues were also discussed much in detail. IUMI’s role and lobbying work at IMO on various important conventions e.g., Containers lost at sea, plastic litter, vessel fire, misdeclaration of cargo, collision convention, compliance of stowage plans and digitalization of vessels is of great help to the maritime and insurance sector. IUMI’s support to Poseidon Principles for marine insurance is a welcome move. IUMI and ICC (International Chamber of commerce) are also working on paper less trade options for trading documentations and bringing marine insurers on similar platforms.
Legal and Liability committee discussed on cargo owners liability, lithium-ion vehicles transportation, Proper implementation of IMO Conventions (Blue Cards), Non IG (International Group) insurers, united interpretation (UI) on the test for breaking the owner’s right to limit liability under the IMO liability and compensation conventions, IMO scoping exercise on unmanned vessels (MASS) and how existing regulatory structure could apply to unmanned vessels, including the legal status of an AI provider in the unmanned vessel risk, potential for product liability claims, shipbuilder liability etc. Emerging risks in Offshore / Renewable Energy, Floating Windmills, under ocean/sea cabling creating new challenges and liability issues for marine insurers.
Launch of IUMI Masterclass in Cargo Insurance was also announced by Sanjiv Singh, Chair, Education Forum at the Spring Meeting. Masterclass is one-of-a-kind learning program curated for senior marine insurance professionals and offers an exclusive opportunity to deep dive into key concepts (contract of affreightment, construction of an international program, coverage extensions, CAT and accumulation modelling, geopolitical risks) of this class of business. The course also offers a visit to the Lloyds of London, which is a great attraction for every aspiring marine insurance professional.