MARINE INSURERS GET ONBOARD FOR CLIMATE CHANGE

Jan 26, 2023 | Maritime business news

The first Annual Disclosure Report for Poseidon Principles for Marine Insurance has been published, and is considered a landmark step forward towards transparency in the maritime and insurance sectors, acting as a stepping-stone for signatories to engage their clients in a discussion about climate change, technology, and new risks.

In the report, eight leading marine insurers have gathered and published client data to track their hull and machinery insurance portfolio’s climate impact. The goal is to support the industry’s green transition.

Patrizia Kern, Chair Poseidon Principles for Marine Insurance initiative and Marine Strategy Advisor – CEO Office Swiss Re Corporate Solutions, said: “This level of transparency is a major milestone on our journey to decarbonise the maritime industry.”

On average, the Signatories’ portfolios are 12.7% above being aligned with reaching the UN maritime-goal of at least 50% reductions of the annual greenhouse gas emissions from international shipping by 2050, compared with their level in 2008. The second trajectory the Signatories track takes is more ambitious and has a goal of zero CO2 emissions in the middle of this century. The simple average score of the 100% CO2 emission reduction track is 20.8% above alignment.

Kern added: “It is evident that there is work to do, but hard data and transparency is a necessary first step.”

Rolf Thore Roppestad, Vice Chair of the initiative and CEO Gard, which insures about 50% of the global merchant fleet, said: “We know there is room for improvement, both in our climate alignment score and in the data collection process itself, but that is why we wanted to be part of the Poseidon Principles for Marine Insurance. This is a journey we are on to learn and improve, and together with our clients, I am confident we will make the necessary progress.”

The data covers 2021 – not yet 2022, due to the complexity of the task. Further, the numbers do not cover the Signatories’ entire hull and machinery portfolios, as not all clients report their data back to the insurance providers. In addition, it is industry practice that each ship is insured by a primary insurer and several secondary insurers, because of the extraordinary value of modern ships, which adds another level of complexity to the data collection.

Kern concluded: “The insurance companies are only one component in a complex ecosystem, but while engaging with our clients we can become levers of change.”

Marine insurers see engagement with their clients as a way of contributing to the wider sector, given that international shipping emits 2%-3% of global GHG emissions, transporting close to 80% of trade by volume.

The report can be viewed here.

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