Tag: marine insurance

Insurers face tougher times as Somali piracy drops

IUMI Conference: Unpredictable Time for Marine Insurance

Implications of insurance law changes for the shipping industry

Ransom insurance was becoming a necessity in Australia's international trade A ransom up to $4 million was paid through Australian companies and insurers to Somali pirates who seized a bulk carrier in 2008.Many shipping firms are employing armed guards and considering longer, more expensive voyages to avoid pirate hot spots east of Africa.The ransom was paid to recover an Australian cargo of 50,000 tonnes of lead and zinc aboard the Panama-flagged container ship Stella Maris.The carrier, with a crew of 20 Filipinos, was seized by Somali pirates in the Gulf of Aden in June 2008, Australian Shipping chief executive Llew Russell said.Ransom insurance was becoming a necessity in Australia's international trade, 99 per cent of which travelled via sea, Mr Russell said."You've got to pay the ransom," he said.If companies refused to negotiate ransoms, crews would not be willing to ply the seas off Somalia or other hot spots, including the Strait of Malacca.Piracy is costing the global economy $7 billion a year.Some Australian shippers were so wary of running the gauntlet off Somalia, as they head towards the Suez Canal, they were now rounding the Cape of Good Hope at an extra cost of $2 million per container ship ...

Iran offers to insure foreign ships in Iranian waters

Japan insurers expand cover to boost Iran oil shipping capacity

From July, EU based insurance firms will no longer be able to insure any ship carrying Iranian oil In ten days on July 1st a sweeping European Union ban on Iranian imports will go into effect in response to the Islamic Republic's burgeoning nuclear program. In addition, and just as importantly, EU based insurance firms will no longer be able to insure any ship carrying Iranian oil.Iran is OPEC's second biggest oil producer behind Saudi Arabia. Oil analysts at Citigroup expect that Iran will still be sending out 1.25 million barrels a day, about half of last year's production.Brent crude is currently trading in the $95 dollar a barrel range , that's down eleven percent year to date. Light sweet is in the $83 dollar a barrel range, down 15% year to date.Ray Carbone is President of Paramount Options. He believes we'll see an upward trend before the July 1st deadline but it's unclear how high oil could go. Carbone says "it depends to a large degree on how much of Iran's share of oil OPEC is willing to pump out and that's still a question mark."Despite the EU ban several countries will still be importing Iranian oil. On the ...

$7.6 billion should there be an accident on an Iranian oil tanker coming to Japan Last week, the Japanese government's cabinet ministers both approved and submitted a bill to the Diet that allows insurance coverage to be made on oil imports from Iran. This is in direct opposition to the ban on Iranian oil insurance from the European Union that will take effect on July 1st. If passed by parliament, the bill would permit the government to make payments as high as $7.6 billion should there be an accident on an Iranian oil tanker coming to Japan.While the European Union is showing no signs of leniency, Japan has requested to be exempted from the ban on insurance of Iranian oil exports. The Japanese government has also made it clear that it has no intentions to stop importing oil from the Middle Eastern nation. The European Union's ban is just one of many attempts by Western nations to put sanctions on Iran with the hopes of convincing Tehran to abandon its nuclear development program via depleting its revenue sources. While not stopping altogether, Japan has reduced the amount of its oil imports from Iran, despite the sharply increasing demand after halting ...

European Union oil embargo on Iran will take effect in July Marine insurance, or lack of it, may yet turn out to be the most effective sanction used by Western nations in 17 years of tightening the screws on Iran's nuclear program.A European Union oil embargo on Iran, set to take effect in July, prohibits EU insurers from covering Iranian oil exports anywhere in the world. With around 90 percent of the world's tanker insurance based in the West, the arcane world of reinsurance and liability coverage has become a powerful weapon.Iran, OPEC's second-largest producer, exports most of its 2.2 million barrels of oil per day to Asia, and the four main buyers - China, India, Japan and South Korea - have yet to find a way to replace the predominantly Western cover for the giant crude oil cargoes en route from Iran to refineries across Asia. And that could dent Iranian crude exports to key markets, particularly Japan, cutting off a valuable source of Tehran's foreign exchange income. Crude oil prices have risen close to 40 percent to above $100 per barrel since October, partly on fears over supply disruptions from Iran."The bottleneck is insurance. If that's not settled, ...

Ship owners must alert insurer of Iran oil voyages Ship owners covered by Japan P&I club must alert the maritime insurer in advance of any plans to transport Iranian oil and petrochemicals that could fall foul of Western sanctions, the insurer said.The United States and European Union have tightened measures aimed at reducing Iran's oil trade, stemming the flow of petrodollars to Tehran to force the OPEC member to halt a nuclear programme the West suspects is intended to produce weapons.European insurers and reinsurers will be prohibited from indemnifying ships carrying Iranian petrochemicals anywhere in the world from May, and crude and oil products from July.Although Japan's P&I Club, which provides insurance for shipping companies, does not directly fall under the sanctions regime, it is largely dependent on the European reinsurance market to hedge its risk."Any reinsurers including other (P&I clubs) subject to EU legislation will not be able to pay out if a claim involves a sanctioned cargo," said Japan's main ship insurer in a circular to its members on Tuesday."This will impact the member's ability to make a recovery from the club as the club is not able to pay out on any claim in relation to which ...