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Fires and fuels top the agenda in insurers’ efforts to cut claims

Insurance union is pushing for regulatory changes to tackle persistent safety problems.

The International Union of Marine Insurance (IUMI) policy forum has been facing a growing list of safety concerns, partly driven by the technological challenges of the shift to decarbonisation.

The issues are likely to keep Frederic Denefle, managing director of French war risk underwriter Garex — who has been nominated to be the next IUMI president — plenty of work over the next few years. Marine fuel has been a major concern for insurers with the move to ultra-low sulphur fuel in 2020, and another major fuel contamination incident in Singapore earlier this year.

Claims related to machinery failure due to the use of contaminated fuels have put increasing pressure on insurers to make sure shipowners thoroughly test fuels to protect themselves.

IUMI has been pushing for regulators to put more responsibility on refiners to deliver non-contaminated fuel rather than leaving it to shipowners to test the fuels they have bought.

The forum has also been looking at the safety of zero or low-carbon emissions fuels that are set to emerge in the next decade. It has identified significant issues related to ammonia, hydrogen, battery and even atomic-powered propulsion.

IUMI is closely monitoring the development of safety regulations around their use.

Decarbonisation is also leading to a change in the type of cargoes being carried on ships. An increase in the transportation of lithium-ion batteries poses a fire threat both on container ships and car carriers shipping electric-powered vehicles.

IUMI is hoping to support work carried out by the International Maritime Organization on the risks associated with the transportation of lithium-ion batteries. Container ship fires appear to have decreased in number this year, but the most recent incident involving the 8,586-teu Zim Charleston (built 2011), which caught fire in the Indian Ocean earlier this summer, indicates the problem is not going away.

The increasing number of ultra-large container ships has added to the potential scale of the problem.

IUMI has been backing moves at the IMO to improve the firefighting capability of container ships. It is involved in discussions on amending the International Convention for the Safety of Life at Sea — Solas — requirements for fire detection and firefighting capabilities. The IMO has set a target date of 2025 to complete this work and, if it all runs to schedule, the new requirements could be applied to newbuildings by 2028.

Engine room fires are also a considerable source of claims for marine underwriters. Claims related to high-pressure fuel systems have fallen following a change in design rules. But there is still a problem related to low-pressure systems that IUMI has been working on to resolve with the International Association of Classification Societies.

Source: TradeWinds

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