The impacts of climate change on marine cargo insurance

By Francois du Plessis, Senior Underwriter Marine - Nordics, AIG Europe S.A.

As global trade increases, supply chains become more complex, and in turn, the exposure to supply chain disruptions and risks increases. This scenario is the case for all businesses trading goods worldwide (via land, air, or sea). As a result, companies need to critically evaluate any potential risk sources and plan suitable mitigation strategies to remain competitive and profitable. To this end, most organisations choose to transfer these risks to marine cargo insurance companies.

Now, consider the risk of climate change, one of the most critical issues facing humanity today, with new insights on the topic published on a near-daily basis. The Intergovernmental Panel on Climate Change (IPCC) estimates that global disruptions resulting from climate extremes will continue far into the future, impacting physical, biological, human, and managed systems. Globally, there is a growing concern about the potential impacts of climate change on supply chains. Therefore it is becoming imperative to evaluate these risks and provide the relevant stakeholders with solutions that can assist with forecasting future situations to enable better decision-making.

My research aims to understand whether climate change (which bridges as a natural and man-made macro risk) is a source of marine cargo insurance claims. To do this, I investigate and identify (1) trends, gaps, and limitations in published academic papers through a systematic literature review and bibliometric analysis; (2) possible cause-and-effect relationships between climate change and marine cargo insurance claims, (3) the current perceptions of relevant stakeholders on the impacts of climate change on port operations, cold chains, and marine cargo insurance. My research is supervised by Prof. Leila Goedhals-Gerber from the Department of Logistics and Dr. Joubert van Eeden, from the Department of Industrial Engineering, both from Stellenbosch University.

Finally, I aim to share the research results through papers published in academic journals and to share the findings within our IUMI community.


About the author:

Francois (Frans) du Plessis is a Senior Marine Underwriter for the Nordics at AIG in Stockholm. He is currently pursuing his PhD in Logistics Management at Stellenbosch University, South Africa. The IUMI Cargo Committee supports Francois’ research.