Marine Insurers and Shipowners Unite for Greener Shipping Futures (Reinsurance News)

Marine Insurers and Shipowners Unite for Greener Shipping Futures

  Friday, February 23rd, 2024 Source: Reinsurance News

A recent white paper by Atrium underwriting firm and Bayes Business School at City, University of London, calls for a strengthened partnership between marine insurers and shipowners to spearhead decarbonisation in the shipping industry. Given the sector’s substantial contribution to global greenhouse gas emissions—currently at 3% but potentially rising to 13%—the urgency for greener practices is more pressing than ever. The shipping industry’s slow progress in emissions reduction contrasts starkly with advancements in other sectors, underscoring a critical need for action.

The International Maritime Organization (IMO) has introduced measures like the Effective Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII) to evaluate and improve the environmental impact of maritime operations. The CII, which grades vessels on emissions performance, mandates lower-rated shipowners to develop action plans to cut GHG emissions, showcasing regulatory efforts to enforce greener practices.

Insurers, according to the paper, play a vital role in supporting decarbonisation by integrating compliance requirements into insurance policies, adjusting premiums based on emissions data, and fostering innovation through close collaboration with clients. However, the challenge for insurers lies in promoting sustainability while ensuring market competitiveness and legal compliance, including adherence to anti-trust laws.

With marine insurance premiums hitting $US35.8 billion in 2022, the call for collective action is clear. The path to sustainability in shipping demands concerted efforts from all industry stakeholders, highlighting the importance of collaboration between insurers and shipowners. As the maritime sector moves towards a greener future, such partnerships are pivotal in achieving meaningful and sustainable reductions in greenhouse gas emissions.

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