The Implications of ‘Green Seaworthiness’ on the Insurability of Global Maritime Risk

“Abstract

The environmental impact of vessels is a prevalent concern for stakeholders throughout the maritime industry. Recent decarbonisation initiatives present new challenges to shipowners with potential far reaching implications. In the event of a vessel’s non-compliance with decarbonisation regulations, there is a risk of ‘green unseaworthiness’ and penalisation under marine insurance contracts. This study examines these implications from a legal and commercial perspective, through semi-structured elite interviews with 47 key stakeholders in the global maritime and marine insurance industries, and two focus groups with national governmental maritime policy makers. Ultimately, there are limited concerns from a physical risk perspective for marine insurers. However, from a reputational point of view, the moral hazard of non-compliance is a highly probable emerging risk for marine insurers, with potential knock-on effects to the maritime industry seeking risk transfer. Introducing innovative insurer-backed value propositions are recommended to mitigate such potential effects.”

 

The full report is accessible via: https://dx.doi.org/10.2139/ssrn.5039158

For related publications please see Resources – UK National Clean Maritime Research Hub