Vessels are exposed to higher fire risks caused by many issues including increased shipments of highly combustible lithium batteries. However, vessels may lack adequate firefighting resources and this could lead to severe damage and losses.
“There is a bigger risk of fire on vessels, especially on container carriers and car carriers. There are various factors driving this. Misdeclaration of cargo continues, where dangerous cargo is declared as non-dangerous cargo,” said said Chubb Asia Pacific marine head of transportation risk management Sivakumaran Divakaran speaking to Asia Insurance Review.
He said that vessels have also increased in size. However, such vessels remain insufficient and unable to cope amid an increase in dangerous cargo shipments, especially those carrying lithium batteries.
“In particular, on car carriers, there is an increase of EV shipments, but existing fire-fighting capabilities are not effective in extinguishing electric vehicle fires,” he said.
Supply chain risks
The marine industry remains threatened by conflicts and natural catastrophes around the world. Captain Divakaran said that ongoing geopolitical tensions and Russia president Vladimir Putin’s invasion of Ukraine could lead to supply chain disruptions.
“Trade wars could lead to cargo detention, rejection, re-routing, all of which increases risk exposure,” he said.
“National catastrophe related events, including tropical storms, hurricanes and typhoons are reportedly getting more powerful and of higher intensity and can lead to more losses both at sea (cargo on vessels) and on land (cargo in transit or storage). Examples include containers or cargo being lost overboard or damaged, cargo movements due to violent vessel motion, floods at ports, warehouses or windstorm damage to warehouses,” he said.
Improving the claims process
Marine insurers like Chubb settle straightforward lower value claims (where all relevant supporting documents are provided) within one to two days according to Captain Divakaran. For more complex claims, a loss adjuster is appointed to report on the circumstances of the incident, ensure salvage and recovery rights are maximized and enable the insurer’s claims handler to settle the claim as soon as possible within the terms of the marine insurance coverage.
However, better understanding between insurers, clients and brokers is needed to improve the claims process.
“The broker plays a role in managing the client’s expectations and guiding the client through the claim process. For generalist brokers who do not have extensive experience in marine they should work with their marine insurer to clarify any coverage issues or potential roadblocks as early as possible and work through the process together. Effective communication between the broker, insurer and client goes a long way to avoiding claims going off the rails,” he said.
Source: asiainsurancereview.com