Julian James, Lloyd’s Director of Worldwide Markets, speaking at a conference in Paris, warned that marine underwriters should rethink and restructure the way they they write risks, as bigger vessels, more passengers and increasing machinery failures are increasing their exposures.
Lloyd’s specified three areas of concern:
– The maximum size of container ships has increased from 4,500 TEU in 1998 to 18,000 TEU in 2001
– Bigger cruise ships carry more passengers and travel at higher speeds; they’re also “venturing into colder waters,” which puts them more at risk from icebergs “as global warming affects the rate at which bergs calve from the polar ice caps.”
– “Increasing losses due to fires breaking out on older vessels.”
James told those attending the Vitrine de la Voile event, sponsored by the British Embassy in Paris, that “The concentration of hull, machinery and cargo exposure in the event of total loss can be huge today compared to a few years ago – up to $2 billion – especially with bigger container ships being introduced.”
He indicated that underwriters should spread their exposures “between syndicates and companies alike,” and predicted “more layering of risks than ever before between different companies, or perhaps even exclusions being invoked.” He added that Lloyd’s saw improving market conditions in marine rates and would continue to “play a leading role in this market.”|”lloyd’s, warns, of, greater, exposures, marine, underwriters
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