What marine insurance buyers want
‘You might be able to get it cheaper but you need to know at the end of the day insurers are going to pay out in a timely fashion and you’re not left out of pocket for an extended period,’ Ardmore Shipping’s Georgina Alderman says
Trust is more important than getting the lowest-cost cover, buyers insist
However you break down the cost centres, marine insurance remains one of the largest outlays for shipping companies after crewing costs.
The size of the typical spend is one of those of “how long is a piece of string” questions, as premiums vary widely by fleet value and claims record. But on some reckonings, it makes up around 10% to 15% of typical total opex.
Lloyd’s List’s website offers extensive coverage of protection and indemnity (P&I), hull and machinery (H&M) and war risk insurance. But we tend to write from the perspective of insurers and brokers, the audience Lloyd’s List was founded to cater for as a print publication in 1734.
The P&I clubs into which any given vessel is entered is rightly a matter of public record and can be checked on the International Group’s website but details of H&M and war risk cover are not in the public domain. Typically, the risk is spread between multiple underwriters accepting a percentage point share of liabilities and they prefer not to reveal the extent of their exposure.
The buyers’ view
How do things stand from the customers’ point of view? What do shipowners want when they make buying decisions? Are they happy with what they get?
Most owners are reticent to discuss such points. These are matters generally considered commercial in confidence and therefore rarely aired.
Lloyd’s List approached several companies, most of which politely declined interview requests. The exceptions are Ireland’s product and chemtanker operator Ardmore Shipping and Panama-based dry bulk outfit Sagitta Marine, and we thank them for taking part.
Ardmore’s insurance manager, Georgina Alderman, stresses the great store her employers put on relationships within insurance. Trust is far more important than low price.
“You might be able to get it cheaper but you need to know at the end of the day insurers are going to pay out and pay out in a timely fashion and you’re not left out of pocket for an extended period,” she says.
“You want the support of your underwriters to get the vessel back out and up and running and earning money for you.”
For a company the size of Ardmore, which operates a fleet of 22 product and chemtankers centred on 16 medium-range (MR) tankers, her position of insurance manager is a full-time job.