In the report, eight of the world’s pioneering 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.
“This level of transparency is a major milestone on our journey to decarbonise the maritime industry,” says Patrizia Kern, Chair of the Poseidon Principles for Marine Insurance initiative and Marine Strategy Advisor – CEO Office at Swiss Re Corporate Solutions.
Signatories’ portfolios
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.
Average score of the 100% CO2 emission reduction track is 20.8% above alignment
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. “It is evident that there is work to do, but hard data and transparency is a necessary first step,” Kern says.
Many takeaways
In the report, member companies describe individual takeaways and how this new information will influence decision-making.
“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,” says Rolf Thore Roppestad, Vice Chair of the initiative and CEO at Gard which insures about 50% of the global merchant fleet.
Signatories’ entire hull and machinery portfolios
The numbers do not cover the Signatories’ entire hull and machinery portfolios
Gathering data on the portfolios is a complex task. First of all, readers should take note that the data covers 2021 – not 2022. Further, the numbers do not cover the Signatories’ entire hull and machinery portfolios, as not all clients reported 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.
2023 ambition
The Poseidon Principles were established in 2019 by the Global Maritime Forum and a number of financial institutions to create a global framework to quantitatively assess and disclose whether financial institutions’ lending portfolios are in line with climate goals. In addition to the annual report on Marine Insurance, the Poseidon Principles for Financial Institutions published their third annual disclosure report with 28 of them reporting in December 2022.
For 2023, the ambition of the Poseidon Principles for Marine Insurance is to get more members to join the principles, increase the contribution volume from the insurance clients and improve access to data.
Industry foundation is shifting
The insurance companies are only one component in a complex ecosystem"
The very foundation of the maritime insurance sector is changing, according to the Signatories, because the maritime industry has begun its transition away from the monolithic oil-based combustion technology towards a future with a wide array of propulsion technologies and energy sources.
Therefore, each company within the marine insurance sector must understand what they will insure in the future and how new ship technology will work. “The insurance companies are only one component in a complex ecosystem, but while engaging with our clients we can become levers of change,” Kern says.
Greenhouse gas emissions
Climate change is a ‘here and now challenge’ for the insurance industry, and the marine insurers see their engagement with their clients as a way of contributing to the wider sector, given that international shipping emits 2% to 3% of global greenhouse gas emissions, transporting close to 80% of global trade by volume.
Reporting Signatories
Fidelis MGU, Gard, Hellenic Hull Management, Navium, Norwegian Hull Club, SCOR, Swiss Re Corporate Solutions and Victor Insurance.
Affiliate members
Cambiaso Risso Group, Cefor, Cosco Shipping Captive, CTX Special Risks, EF Marine, Gallagher, Lochain Patrick Insurance Brokers, Lockton Marine, WTW.
