Business news from Ukraine

Marine insurance experts call for closer cooperation with shipowners

Maritime insurance experts are calling for closer cooperation with shipowners to develop decarbonization strategies, Reinsurance News reports.

The white paper, co-authored by underwriting firm Atrium and Bayes Business School (formerly Cass), City, University of London, emphasizes the crucial role insurers can play in facilitating the transition to greener practices in the shipping industry, the report says.

Noting the urgency of this issue, the document emphasizes that although the shipping sector currently accounts for about 3% of global greenhouse gas (GHG) emissions, this figure could soar to 13% in the near future.

This forecast is explained by the relatively slow progress in reducing emissions in the maritime industry compared to other sectors.

The International Maritime Organization (IMO) has implemented two key initiatives: The Existing Ships Energy Efficiency Index (EEXI) and the Carbon Intensity Index (CII), aimed at monitoring and assessing the environmental impact of maritime operations.

The paper outlines several strategies for insurers to promote decarbonization, including incorporating compliance requirements into insurance policies, adjusting premium rates based on compliance data, and working closely with clients to explore innovative solutions.

However, the authors warn that insurers must strike a delicate balance between encouraging decarbonization and remaining competitive in the market.

With global marine insurance premiums expected to reach S35.8 billion in 2022, the document emphasizes the importance of collective action by stakeholders to achieve sustainable development goals while maintaining market competitiveness.

The study emphasizes the need for concerted efforts by all stakeholders involved in the maritime industry to successfully overcome the challenges of decarbonization.

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