The International Union of Marine Insurance (IUMI) has said the recent explosion at Tianjin highlights some of the challenges facing marine insurers.
“This extremely sad and regrettable incident demonstrates the persistent growth of accumulation of values in port and storage areas, particularly in highly industrialised regions,” commented IUMI President, Dieter Berg.
Tianjin was hit by a series of large explosions on 12 August, causing over 100 deaths, with people still reported missing.
Large freight handling and storage facilities and the growing size of container vessels are fueling the growth of accumulation risk in the marine sector, says IUMI, as the concentration of assets increases the potential claims from individual incidents.
Extensive damage has been caused to a number of facilities at the port, including Singamas’ container depots. Lloyd’s Agency Network have reported more than 10,000 motor vehicle were also destroyed.
Nick Derrick, chairman of IUMI’s Cargo Committee said: “With average retail values of $30,000 this could result in a loss of $300m for vehicles alone. Container losses are likely to be spread among many marine cargo insurers but motor vehicle insurance is a specialist sector and so that market is likely to be hit hard.”
Berg added: “Man-made losses or damage caused by explosions are hard to model but they are comparable with acts of terrorism.
“To evaluate worst case scenarios we need to fully understand the value of the goods in the port and all potential exposures before we can calculate adequate premiums. This is becoming more of a challenge as these facilities continue to expand.”