Excluded areas left same by war-risks underwriters

The underwriters of London’s Joint War Committee met in December to review the state of trouble spots around the world but decided to do nothing.

Despite threats of nuclear war between North Korea and the US, conflict between Saudi Arabia and Houthi fighters in Yemen, a diplomatic crisis between Qatar and its Persian Gulf neighbours and renewed tension with Iran, there has been no change for more than two years to the list of areas where additional premiums may be charged for war-risks cover.

There are more than 20 areas of the world listed by the Joint War Committee where annual war-risks cover is insufficient, but the market has continued to soften since the pirate threat diminished six years ago.

The last change to the listed areas by the Joint War Committee was in December 2015.

Additional premiums that might have been 0.1% of the value of a ship for a transit or short port visit in 2010 can now be one-tenth of this figure.

Some of the areas that are listed as subject to additional premium, such as Iran, Syria and Venezuela, are typically offered for free.

Venezuela has been pushing to be taken off the list of higher-risk nations but there is little inclination to do so for now.

The South American country was listed as a higher-risk area in 2009, after the government of Hugo Chavez confiscated foreign-owned oil-related assets, including Tidewater offshore vessels and hundreds of other craft, transferring them to state oil firm Petroleos de Venezuela.

There has also been some pressure to align the insurance industry’s listed areas with the higher-risk regions, identified in shipping’s Best Management Practices guidance to deter piracy. But underwriters’ listed areas are commercially driven rather than specifically linked to practical issues of deterring pirates from attacking a ship, so this is unlikely to happen.

Although the listed areas are produced by war-risks underwriters at Lloyd’s and in the London market, they are widely followed around the world.

Source: Tradewinds

FacebookTwitterGoogle+