Ships are incredibly complex and expensive industrial assets which are exposed to a wide range of risks in the service of world trade. Marine hull and war risks insurance is a means by which shipowners can manage the risk of loss or damage to the ship and its machinery.
Originally established to liaise with the London marine hull insurance market, the Insurance Committee’s remit was broadened in 2001 to include liaison with the London war risks market. In recent years, the Committee has also sought to extend its relationships with other major international marine hull insurance markets in Europe and Asia.
The Committee discusses topical marine insurance issues and related matters such as salvage and develops ICS positions for discussion with underwriters’ representatives and other relevant bodies.
Historically, the practice of marine hull underwriters was to present shipowners with significant changes to cover as a fait accompli. When ICS objected to the introduction of revised London market Institute Time Clauses – Hulls (1999/2003) without any prior notification or consultation with shipowners, a valuable improvement in the dialogue between shipowners and underwriters eventually emerged. This was maintained and broadened to include representatives of the War underwriters after the September 11, 2001 terrorist attacks when rates escalated.
The Insurance Committee reports directly to the ICS Board, works closely with the Maritime Law Committee, and supports the work of other ICS Committees, especially the Marine Committee as technical and safety requirements and insurance are interlinked.
The Committee liaises with major international marine hull insurance markets, in particular, the London market as represented by LMA and IUA, the Nordic Market as represented by CEFOR, and a wide range of other important national and international marine insurance associations as represented by the International Union of Marine Insurers (IUMI).
The Committee also supervises ICS engagement in the work of the CMI on marine insurance matters, and the Lloyd’s Salvage Group, the SCOPIC Committee and associated sub-committees and groups on salvage issues, which are served by the Lloyd’s Salvage Arbitration Branch.
The Committee comprises insurance policy experts drawn from ICS national associations who are often accompanied by marine insurance practitioners from their own member shipping companies. A wide-range of issues is considered; to name only a few past topics on the agenda: increased claims as a result of engine damage caused by CAT fines in new grades of low sulphur fuel oil; costs of wreck removal and salvage capability for very large ships; the CMI review of the York Antwerp Rules for General Average; and changes to the Joint War Committee’s Listed Areas with the increase and suppression of Piracy in the Indian Ocean.
In addition, the Insurance Committee Chairman participates in regular meetings with the Chairmen of the London market Joint Hull and Joint War Committees, accompanied by the secretariat, in order to discuss topical issues and maintain the on-going dialogue.
The Chairman and the Secretary also represent ICS at meetings in London concerning salvage matters,
The secretariat represents ICS at CMI meetings on marine insurance matters, such as the recent review of the York Antwerp Rules on General Average where ICS engagement led to improvements to this casualty and risk management tool benefiting all stakeholders – shipowners, their customers, and their insurers.
Some of the most important issues on the agenda of the Insurance Committee are:
- COVID-19 marine insurance issues.
- Marine Autonomous Surface Ships: discussion of future insurance arrangements for autonomous vessels and other innovative technology closer to the horizon.
- Containership fires.
- Sustainable Insurance: unepfi.org/psi/
- Cyber Risks and shipowners’ concerns about the conditions for cover and the extent of cover provided.
- JWC Listed Areas:
encouraging clarity and transparency in the JWC’s risk assessment and procedure for amending its Listed Areas. This is important for shipowners as these defined geographic areas of perceived enhanced risk are areas where insurers are permitted to charge an additional premium for vessels that enter.
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