Bigger ships, more passengers and increased mechancial failures are ceating greater exposure for marine underwriters.
Director Worldwide Markets at Lloyd's, Julian James, speaking at a marine event in Paris recently, outlined what he saw as the key factors forcing underwriters to rethink the way they write risks.
These are:
Dramatic increases in the maximum size of container ships from 4,500 TEU in 1998 to 18,000 TEU in 2001;
Greater exposure produced by faster cruise ships, greater passenger numbers and voyages into what he called "adventurous" waters. In particular, ships which travelled further north in colder waters were in danger of hitting icebergs caused by the affects of global warming;
Lastly, he said fires were breaking out more frequently on older vessels through a lack of proper maintenance.
James said: "The concentration of hull, machinery and cargo exposure in the event of total loss can be huge today compared to a few years ago - upto $2bn - especially with bigger container ships being introduced."
