The S in ESG: The Beating Heart of Marine Insurance

[By: Nor-Shipping]

As the world’s leading marine insurer, Gard knows a thing – or three – about ESG. Chief Executive Rolf Thore Roppestad and Vice President, Head of People Claims, Lene-Camilla Nordlie spotlight how they view the S in this increasingly important triumvirate.

Headquartered in the small Norwegian port city of Arendal, Gard interacts with a substantial part of the world fleet and through that, a considerable portion of the world’s seafarers. In fact, it provides cover for as much as 50% of the entire merchant fleet around the world (measured in gross tonnage) and about 20% of all seafarers.

As the world’s leading P&I club, Gard provides a mutual insurance service covering a wide range of liabilities that may arise from the operation of a vessel, such as pollution, cargo damage, collision, other third-party claims, and of course crew-related matters. People Claims represents the lion’s share of the claims notified to Gard.

Social security for seafarers

The top cause for marine casualties and accidents is human error and so it makes a lot of sense for Gard to focus on improving the working environment for seafarers, as better conditions, security and support can reduce distractions and lead to safer ship operations. Gard takes its role as a leader in the P&I marine insurance industry very seriously and is especially proactive in ESG practices.

‘We started a process in 2017 to look at ESG and sustainability more systematically, and how we as a company could make a positive contribution,’ says Roppestad. ‘At the end of the day, we insure people, the environment and property, so our business is all about ESG.

‘We currently cover around a fifth of the world’s seafarers – some 400 000 seafarers. In practice, that means that we provide social security for a significant part of the global maritime workforce. We work to make sure they get medical treatment when needed, that they have fair and clear working contracts and that they are compensated if something happens. This is the ‘S’ in ESG.’

Help right into your pocket

An example of how Gard puts its money where its mouth is involves the development of a new digital app, the international Mariners Medico Guide, which was launched in December 2022 in co-operation with the Norwegian Centre for Maritime & Diving Medicine.

Gard has made this advanced digital medical handbook free to download as a user-friendly app to all seafarers worldwide. ‘We decided to give it out for free, even to ships that are entered with other P&I clubs,’ says Nordlie, before adding ‘it is actually available free to everyone - even you and I can use it.’

The app is not dependent on wifi access so seafarers can get immediate help and support even mid-ocean and without a signal. ‘Whenever there is illness or an accident on board it can be very hard to access good medical advice and often seafarers are very far from shore,’ she explains. ‘It is important that the medical person responsible for the crew members on board is able to offer first aid and preliminary medical advice to the seafarer to make sure that he or she is being given the best chances to recover after any incident.’

Apart from instant accessibility and mobility, another key advantage the app has over hardcopy books is it can be revised quickly to include up-to-date information. Imagine a new virus, or even another pandemic spreading, and the advantages of being able to give quick and up-to-date guidance to crew – right into their pockets.

‘For us at Gard, it’s all about being able to help,’ says Nordlie. ‘Taking care of people is the most important thing that we can do together with the ship owners and the employer. Covid triggered much-needed attention to the challenges of crew on board, and especially that more needs to be done to support mental health,’ she adds.

Nor-Shipping provides a platform

Sustainability and ESG are clearly not just buzzwords in Gard’s lexicon. The company is proactive both in integrating them across its own operations and by promoting them across the industry.

One arena will be at the forthcoming Blue Talks series at the Nor-Shipping conference on 6-9 June this year in Oslo and Lillestrøm in Norway. Gard is a main partner at the Blue Talks series, which is an ideal forum for industry players to discuss the most pressing topics and drive the agenda forward together with key decision makers from across the world.

‘It is very beneficial for a company like Gard to take part in events like Nor-Shipping,’ explains Roppestad, ‘particularly for creating contacts and relationships with people you don’t deal with on a day-to-day basis. Meeting with maritime authorities from across the world, for example, that is highly valuable for us. As part of our outreach program, we try to have meetings and workshops on a regular basis with maritime authorities and other key stakeholders across the world. This makes it easier for us to collaborate when something goes wrong.

‘When you are dealing with a casualty at sea, you can either start 10 metres behind the starting line, or you can be ready to go from the very start. Having built relationships and trust over time, knowing the relevant stakeholders and making sure we are aligned, makes all the difference. It gives you have a big head start when it comes to mitigating the process. I think that is very important.’

Premium outcome

A clear past example of how building trust in this way can pay off was when the Blue Star Patmos ferry ran aground off the Greek island of Ios in the Aegean Sea in 2017. Gard had already put in place a plan of action with the Greek maritime authorities so that made the casualty handling easier. Quick thinking and efficient casualty handling meant the ship could be salvaged before becoming a total loss, avoiding substantial damage to the environment and a substantial financial loss.

Gard handles between 15,000 and 20,000 claims every year, so as both Roppestad and Nordlie point out it is important to be prepared, and having ESG principles truly integrated into operations has already had far-reaching benefits. ‘When we have done that, we come out better across all areas. It mitigates losses both for the shipowner and for society, and it also reduces the total costs for us as an insurance company,’ says Roppestad.

‘As a P&I club we are mutual insurance company and not-for-profit, so the necessary premiums are calculated on the claims being made. When we succeed in mitigating claims, minimising losses, it is good for society and it will be good for our members, as they will get a lower insurance premium,’ he adds.

Problem solving

Both Roppestad and Nordlie have been with Gard for many years - 25 and 19, respectively. So what is it that is so attractive with this line of business?

‘I think it’s the combination of doing business and doing good at the same time,’ says Roppestad. ‘Growing up by the sea, having had family members working as seafarers or at shipyards for generations, it is a part of the identity. Personally, I also like numbers, so it’s a very good combination.’

But not everyone has to have sea legs to be involved in this business. ‘Actually, I do not particularly like the sea - I get seasick,’ says Nordlie, smiling at the irony.  ‘I come from inland. And I don’t particularly like numbers either – but I do like problem solving, or even better finding ways to avoid the problems,’ she smiles. ‘And I like working with people. I think what is fascinating about Gard is it is has a strong importance for many people.

‘We solve some really challenging problems, and we do it together as a collaboration, with members, colleagues and other industry experts to try to find the best solution for all concerned. That is what I find intriguing, that you can solve big problems with sometimes just a few people being really engaged. Yes, we are big and global in Gard, but at the same time, we can be small and lean.'

Roppestad adds: ‘I think that illustrates that even though marine insurance is a relatively small cog in the larger wheel, we need a huge range of competence throughout our company. We have everything from marine biologists and engineers to economists, lawyers and psychologists - and many different nationalities. That breadth of experience and culture makes it very interesting and motivating to be part of this industry. It’s all about the people.’

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