A white paper, co-authored by underwriting firm
Atrium and Bayes Business School (formerly Cass), City, University of London,
emphasises the critical role insurers can play in facilitating the transition
to greener practices within the shipping industry. Highlighting the urgency of
the matter, the paper underscores that while
the shipping sector currently contributes about 3% of global greenhouse gas
emissions (GHGs), this figure could soar to as high as 13% in the near future.
The International Maritime Organization (IMO) has
implemented two key initiatives, the Effective Energy Efficiency Existing Ship
Index (EEXI) and the Carbon Intensity Indicator (CII), aimed at monitoring and
evaluating the environmental impact of maritime operations.The CII initiative, in particular, introduces a rating system grading
vessels based on their emissions performances, compelling shipowners with lower
ratings to devise and implement action plans to reduce GHG emissions.
The paper outlines several strategies for insurers to promote
decarbonisation, including
incorporating compliance requirements into insurance policies, adjusting
premium rates based on compliance data, and collaborating closely with clients
to explore innovative solutions.
However, the
authors caution that insurers must strike a delicate balance between
encouraging decarbonisation and remaining competitive in the market.
They acknowledge the challenges and uncertainties,
including ensuring compliance with relevant legislation and avoiding breaches
of anti-trust laws.
With the global premiums of the marine insurance
sector reaching $US35.8 billion in 2022, the paper emphasises the importance of
collective action among stakeholders to achieve sustainability goals while
maintaining market competitiveness.
The research underscores the need for concerted efforts from all
stakeholders involved in the maritime industry to navigate the complexities of
decarbonisation successfully. As the sector continues to evolve, collaboration between insurers and
shipowners will be crucial in driving meaningful change towards a greener
future for maritime operations.