The first Annual Disclosure Report for Poseidon Principles for Marine Insurance (PPMI) is a landmark step towards transparency in the maritime and insurance sectors. The data will act as a stepping-stone for the Signatories to engage their clients in discussing climate change, technology, and new risks.
The PPMI are a global framework for assessing and disclosing the climate alignment of insurers’ hull and machinery portfolios. The report presents data from eight of the world’s leading marine insurers to track climate impact on their hull and machinery insurance portfolio. The PPMI goal is to support the shipping industry's green transition.
This level of transparency is a major milestone on the journey to decarbonise the maritime industry.
On average, the Signatories’ portfolios are 12.7% above, aligned with reaching the UN maritime goal of at least 50% reductions of the annual greenhouse gas emissions from international shipping by 2050, compared with their level in 2008.
The second trajectory the Signatories track takes is more ambitious and aims for zero CO2 emissions in the middle of this century. The simple average score of the 100% CO2 emission reduction track is 20.8% above the alignment.
There is evidently work to do, but hard data and transparency are necessary first steps.
Many takeaways
In the report, member companies describe individual takeaways and how this new information can influence decision-making.
There is room for improvement, both in the climate alignment score and in the data collection process itself. This is a journey to learn and improve. Together with clients, the necessary progress will be made.
Gathering data on the portfolios is a complex task. First, readers should note that the data covers 2021 – not 2022.
Further, the numbers do not cover the Signatories’ entire hull and machinery portfolios, as not all clients reported their data to the insurance providers. In addition, it is an industry practice that each ship is insured by a primary insurer and several secondary insurers because of the extraordinary value of modern vessels, which adds another level of complexity to the data collection.
Read the report for a full breakdown of methodology and individual responses here.
2023 ambition
The Poseidon Principles were established in 2019 by the Global Maritime Forum and several financial institutions to create a global framework to quantitatively assess and disclose whether financial institutions’ lending portfolios align with climate goals. In addition to the annual report on Marine Insurance, the Poseidon Principles for Financial Institutions published their third annual disclosure report, with 28 reporting in December 2022.
For 2023, the ambition of the Poseidon Principles for Marine Insurance is to get more members to join the principles, increase the contribution volume from the insurance clients and improve access to data.
The industry foundation is shifting
The very foundation of the maritime insurance sector is changing, according to the Signatories, because the maritime industry has begun its transition away from the monolithic oil-based combustion technology towards a future with a wide array of propulsion technologies and energy sources. Therefore, each company within the marine insurance sector must understand what they will insure in the future and how new ship technology will work.
Climate change is a ‘here and now challenge’ for the global insurance industry. The marine insurers see their engagement with their clients as contributing to the broader sector, given that international shipping emits 2% to 3% of global greenhouse gas emissions, transporting nearly 80% of global trade by volume.
Reporting Signatories:
Fidelis MGU, Gard, Hellenic Hull Management, Navium, Norwegian Hull Club, SCOR, Swiss Re Corporate Solutions and Victor Insurance.
Affiliate members:
Cambiaso Risso Group, Cefor, Cosco Shipping Captive, CTX Special Risks, EF Marine, Gallagher, Lochain Patrick Insurance Brokers, Lockton Marine, WTW.
IUMI is a Supporting Partner of the PPMI.
