• 2020 September 17 16:15

    COVID-19 is negatively impacting the offshore energy insurance sector, but market is beginning to harden, says IUMI

    At today’s session of the IUMI (International Union of Marine Insurance) annual conference, delegates heard that the offshore energy sector was continuing to suffer from a depressed oil price. Reduced demand for oil as a result of COVID-19 has driven down the oil price and resulted in reduced production and an erosion of asset base values.

    Chair of IUMI’s Offshore Energy Committee, James McDonald, explains:

     “Within the OECD, 7.8% of oil is used for aviation and that industry has collapsed as a result of coronavirus. Similarly, lockdown measures have encouraged fewer people to travel by car and less freight to be carried by truck. As a consequence, offshore oil production has reduced and in the last nine months, the world’s major oil companies have downgraded their asset base values by US$87billion – around 10% of their combined market cap. Policies renewed at the lower oil price or asset valuation will, inevitably, attract lower premiums and that is an issue for our sector”

    IUMI’s analysis of global offshore energy premiums for 2019 showed a 1.4% reduction on the 2018 number down to US$3.35 billion. Although a lower number, the percentage reduction is more encouraging than the 3% reduction in 2018 and 5% in 2017. The impact of coronavirus will not be known until next year, but global premiums are expected to reduce further which will cause an additional headache for underwriters:

     “The global premium base continues to shrink and is now at a level where one major loss could eclipse the entire annual income earned by the sector. This is a precarious and uncomfortable position to be in”, says McDonald. “As a consequence, we are beginning to see a hardening market”.

    Social changes are also a factor, he says:

     “As the world rightly moves towards a more sustainable future, society’s reliance on hydrocarbons – particularly oil – will continue to reduce. Within the OECD, around 50% of oil is used in cars and trucks and some commentators believe that electric alternatives might overtake conventional vehicles as early as 2026. Gas fired power stations will be replacing coal fueled ones, particularly in light of significant gas finds offshore Turkey and east Africa”, says McDonald.

     “While this will impact part of our sector, I am confident that in the long-term the drive for offshore renewable energy will replace lost business. Offshore renewables such as wind farms are already commonplace in the shallow waters off northern Europe and will soon move to deeper waters and wider geographies such as Japan, China and North America. Added to this, floating solar structures are now being produced and once the technology has been improved, we would expect wave and tidal projects to become more available.”
     
    The International Union of Marine Insurance (IUMI) represents 43 national and marine market insurance and reinsurance associations. Operating at the forefront of marine risk, it gives a unified voice to the global marine insurance market through effective representation and lobbying activities. As a forum for the exchange of ideas and best practice, IUMI works to raise standards across the industry and provides opportunities for education and the collection and publication of industry statistics. IUMI is headquartered in Hamburg and traces its roots back to 1874.




2020 October 29

18:31 Wan Hai Lines to launch Straits – Bangladesh Express Service
18:09 Lloyd’s Register launches dedicated Maritime Decarbonisation Hub
17:56 Bill on corporatization of FSUE Rosmorport submitted to RF Government
17:56 Hapag-Lloyd announces winter surcharge to and from St. Petersburg and Ust-Luga
17:30 Rosmorport’s Azov-Black Sea Basin Branch purchased 5 tugboats
17:05 Wärtsilä to collaborate with Anemoi Marine Technologies in future sales of Rotor Sail solutions
16:59 Romania’s border authorities using EMSA RPAS for coast guard surveillance
16:35 Jon Fredrik Baksaas appointed DNV GL’s Chair of the Board
16:17 Nordion Energi moves closer to the aim of 100% green energy by joining the European Clean Hydrogen Alliance
16:01 Port of Los Angeles streamlines online permit process
15:28 MABUX released Bunker Weekly Outlook
15:22 Bunker prices are slightly down in the Far East ports of Russia (graph)
15:20 CMA CGM announces Peak Season Surcharge from China to Russia
15:01 Partnership agreement between leading Hamburg Port Authority and Tanger Med Port Authority
14:36 Port Kolomna takes delivery of multibucket dredger of Project 3409
14:11 MAN compressor technology for largest FPSO vessel offshore Brazil
13:53 Novatek to launch LNG terminal in Rostock (Germany) in 2023
13:30 Rosatom looks into using barges for LNG delivery to Arctic regions
13:11 IMEC and ITF opens big quarantine and testing facility in Manila
12:52 RS grants GASA to GTT’s Mark III Technology
12:29 Rosatom expects reactor plants RITM-200 to be efficient for container carriers and oil tankers
12:10 GTT entrusted by Zvezda with the tank design of ten ARC7 ice-breaking LNG сarriers
11:48 USC forecasts complete transition of shipping industry to electric propulsion in 20-25 years
11:30 Rijkswaterstaat has awarded the enlargement of the Twente canals to a consortium of Van Oord - Hakkers - Beens
11:09 DSV Panalpina acquires Prime Cargo
10:50 Novatek to put into operation 30,000-cbm gas carrier under Cryogas-Vysotsk project in 2022
10:37 Volvo Penta IMO III marine generator sets help power five electric ferries in Norway
10:09 International Association of Dredging Companies signs major strategic collaboration agreement with FIDIC
09:51 MABUX: Bunker Market this morning, Oct 29
09:46 Three LNG-powered product tankers for shipment of stable gas condensate from Ust-Luga to be delivered in 2022-23
09:24 Oil prices show slight increase
09:20 Vestdavit wins contract to supply six French Navy vessels
09:12 Baltic Dry Index as of October 28

2020 October 28

18:15 Sri Lanka's East Container Terminal inaugurates for operations
17:51 Tallink Grupp makes temporary changes to Tallinn-Helsinki route schedule from 29 October 2020
17:30 Key element of Russia’s collider facility NICA transshipped in Bronka
17:06 GONDAN delivers new fishing stern trawler to Prestfjord AS
16:39 Rosmorrechflot resumes work on programme for encouraging LNG-powered shipping
16:13 Cavotec launches next generation MoorMaster
16:05 CNL awarded Transport Canada contract to research clean energy technologies to decarbonize marine sector
15:48 Profit attributable to NOVATEK shareholders amounted to RUB 24.1 billion in 9M’2020
15:25 Petersburg Oil Terminal increased shipments of oil products by 18% in 9M'2020
15:03 World’s first LPG-retrofit announced
14:56 SCF time charters three icebreaking LNG carriers to the Arctic LNG 2 project
14:22 FSUE Rosmorport to adjust design documentation for dredging at LNG terminal in Bechevinskaya bay
14:03 LNG-fueled PCTC“SAKURA LEADER” accredited as the world's first digital smart ship
13:37 Blue Wave terminal in Azov port increased its throughput by 13% in 9M’2020
13:11 Cooperation agreement signed between Fincantieri and the Cochin Shipyard
12:35 LNG bunkering vessel Optimus built by Damen arrived in Shanghai for start-up procedures and sea trials
12:04 CMA CGM announces PSS for cargo from Pakistan to North Europe
11:42 Global Ports to launch tank container repairs service at Yanino
11:23 MPA launches RFP for new LNG bunker supplier licence
11:01 4th “LNG Fleet, LNG Bunkering and Alternatives” conference kicked off
10:50 CMIT receives largest container vessel in Vietnam’s history
10:15 “All Ferries of Russia. Baltic Sea” webinar scheduled for 6 November 2020
10:10 Total charters four new LNG-powered vessels
10:01 MABUX: Bunker Market this morning, Oct 28
09:59 CMA CGM announces FAK rates from Asia to North Europe
09:46 Bunker market sees mixed price movements in the Port of Saint-Petersburg, Russia (graph)
09:28 Oil prices start decreasing