In a joint effort to address the pressing issue of maritime sustainability, marine insurance experts are calling for closer collaboration with shipowners to develop decarbonisation strategies.
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.
This projection is attributed to the relatively slow progress in emissions reduction within the maritime industry compared to other sectors.
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.
Andrew Mackenzie, co-author of the paper and a researcher at Bayes Business School, stressed the pivotal role of insurers in encouraging decarbonisation efforts.
He noted that insurers have a moral obligation to support their clients in meeting regulatory requirements and transitioning to greener practices.
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.
