New Climate Change Study Results from University of London Described (Warming up to Arctic shipping: Unique risk management challenges for marine insurers): Climate Change

2024 APR 04 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Research findings on climate change are discussed in a new report. According to news reporting originating from the University of London by NewsRx correspondents, research stated, “Due to diminishing ice shelves in the Arctic, no doubt caused by climate change, previously unnavigable marine spaces are opening up, which in turn may provide new maritime routes.”

The news correspondents obtained a quote from the research from University of London: “The shipping and maritime industry may capitalise on these routes more in the future as they provide shorter sailing times, and may assist with increasing oil and gas exploration and extraction in the region. However, increased maritime expansion in the Arctic comes with a number of unique risks and hazards for the insured and insurer. This opinion therefore seeks to discuss the implications of the multitude of risks that are associated with Arctic shipping from a marine insurance perspective and to highlight some of the gaps in existing regulatory frameworks. It is argued that marine insurers require improved data and risk management methodologies in order to better calculate the premiums of Hull & Machinery (H&M) and Protection & Indemnity (P&I) insurance policies for ships travelling through the Arctic. Until such time as these risks can be adequately assessed, evaluated, and managed by insurers; which of course is extremely difficult, due to the extreme environment, the unpredictability of climate change, a lack of key data, and the complexity of the various scenarios that can unfold in the Arctic environment, the practical viability of Arctic shipping remains doubtful.”

According to the news reporters, the research concluded: “To date, insurers have paid out more in ship damage that has occurred in the Arctic than they have collected in premiums, which in itself is problematic. This situation may change in the future if Arctic shipping grows, and if it does the insurance market will no doubt, need to respond.”

For more information on this research see: Warming up to Arctic shipping: Unique risk management challenges for marine insurers. Environmental Law Review, 2024. The publisher for Environmental Law Review is SAGE Publications.

A free version of this journal article is available at https://doi.org/10.1177/14614529241239292.

Our news editors report that more information may be obtained by contacting Pia Rebelo, City Law School, City, University of London, United Kingdom. Additional authors for this research include Cyril Uchenna Amaefule.

(Our reports deliver fact-based news of research and discoveries from around the world.)