| Dorothea Ioannou, is Chief Executive Officer, Shipowners Claims Bureau, Inc., Managers, The American Club |
Coming from the world of marine insurance, I cannot but reflect on the prospects as they relate to the risk assessment side of shipping.
As a third-party liability insurer, the Club has unique insight to issues of maritime risk that can affect the insurance sector, but which affect shipping overall, as the International Group of P&I Clubs insures over 90% of the world’s ocean going fleet. What we have seen, that we believe is here to stay in 2023, is a “new risk landscape”.
The last 10 years has experienced a steadily changing risk environment. One major trend is a phenomenon termed social inflation, the rising cost of claims over and above economic inflation with maritime people claims reaching a 50% increase across the board for all countries.
In 2023, we will need to come to terms with this new risk landscape, as a world of constant disruption is here to stay, but we will do so with confidence as the maritime industry has proven itself resilient to facing change, able to adapt and thrive, and the insurance sector, especially that of P&I, right along with it.
This is just one factor of this new risk landscape, which includes the crew competency crisis (technology and regulation outpacing training), seafarer shortage, general economic inflation, narrowing reinsurance appetite, ESG business and regulatory adaptation, rising cost of increasing compliance specialization, geo-political conflict, growing nationalistic policies, conflicting sanctions regimes, the global energy transition, cyber threat, and of course, major investment volatility.
This slow yet steady bombardment of disruption over the past decade was then compounded by the greatest disruption ever seen in recent history – the pandemic – an event never contemplated before by most, yet completely shut the world down.
In 2023, we will need to come to terms with this new risk landscape, as a world of constant disruption is here to stay, but we will do so with confidence as the maritime industry has proven itself resilient to facing change, able to adapt and thrive, and the insurance sector, especially that of P&I, right along with it.
