What is your IUMI role today and what does it involve?

I joined the Legal and Liability Committee in September 2014 and took on the Chairmanship in September 2018. We at IUMI, represent the interest of marine insurers worldwide, and so it is essential that we have an influential voice within the industry. We have a vast amount of knowledge and experience in the Committee, which allows us to engage meaningfully and effectively, with international organisations. We have recently been involved with discussions at the International Maritime Organization (IMO), United Nations Commission on International Trade Law (UNCITRAL) and the IOPC Fund. Our Committee also helps contribute to the annual conferences by sharing knowledge and experiences in presentations that are topical and of value to marine insurers worldwide.

 

What are the main legal & liability issues that are currently impacting marine insurance?

The legal and liability world is continually evolving and bringing in its wake new challenges. One of the biggest challenges facing shipowners and their insurers is the inconsistent interpretation by different jurisdictions of the provisions for breaking limitation of liability in certain conventions. The threshold for breaking limitation is meant to be quite high but some countries are lowering the threshold thereby making it easier to break limitation. Conventions exist for a reason: to bring certainty and consistency. This issue is being discussed at the IMO and our Committee is keeping a close eye on these developments and contributing towards the discussions so that effective solutions may be developed to counter the challenges.

Recently, there have been some very big fines imposed on shipowners and charterers and this has resulted in a great deal of discussion on the insurability of fines and penalties. There are some really interesting issues here - should fines be insurable? If the purpose of a fine is to change behaviour, is it appropriate for the shipowner to simply transfer such risk to insurers? On the other hand, if the shipowner has done everything that they possibly could, but a fine is still imposed on them because of the conduct of a rogue crew member, shouldn’t they be able to protect themselves via insurance? It may be that fines should not be insured under certain circumstances but should be under others. This is one of the topics being discussed within the Committee.

 

Are there any particular legal & liability issues that might become prominent over the course of 2021?

Climate change litigation is likely to be a topic that will become more prominent this year and in the future. This has the potential to be the next tobacco litigation. Insurers need to be aware of the systemic risk this poses and ensure that the exclusionary language used is clear.

Another issue that will be discussed over the next few years will be unmanned vessels and the potential liabilities that can arise from their operation. There is so much to consider here. How does this change the risk? What impact would it have on allocation of liability? Does the current legislation cater for unmanned vessels and if not, what changes need to be made? I am very pleased that two members of our Committee are on the IMO Sub-Committee considering changes that need to be made to Conventions to ensure that they apply effectively to unmanned ships.

 

What effect has COVID had on your sector?

COVID has had a devastating impact worldwide with the loss of life, disruption and consequent economic hardship faced by many. This is something most of us could not even have imagined a few years ago. From a loss perspective, COVID has not had a huge impact on marine insurance unlike certain other areas such as event cancellation and business interruption. The two main marine areas that have seen some claims impact are the cargo market with regard to forwarding charges following port closures and crew P&I claims.

 

What benefits do you get from being associated with IUMI?

For me it is truly a privilege to be associated with IUMI. It is an opportunity to work with highly experienced marine insurers from around the world and to make a real difference. At IUMI we help to shape the future by engaging with maritime organisations worldwide. This is very exciting and professionally rewarding.

 

If you could change anything at IUMI, or marine insurance in general, what would it be?

If there was one thing that I could change within the marine insurance market, it would be eradicating the practice of insuring ships for more than they are worth within the marine hull and war market. Unfortunately, it is not uncommon for ships to be insured for many times their true market value. In a recent high profile insurance dispute where willful misconduct of the assured was alleged, the vessel was said to have been insured for around seven times its replacement value! There is absolutely no justifiable reason to insure vessels for multiples of their true market value. This practice runs the risk of encouraging bad behaviour. The solution is simple: we should move from the traditional “agreed value” policies to “unvalued” policies.

 

And what do you like to do away from the office?

Like most of us, especially since lockdown, the working day seems to have got longer and there seems to be less of a distinction between work and home life, one merging with the other. More than ever before, I value spending time with my two daughters, who seem to be growing up too quickly. I also very much enjoy a round of golf and play most weekends.