Maritime Lessons from a Watershed Year

A new and energetic U.S. administration, agreement on an EU-UK trade deal and resurgent Chinese economic growth offer room for global shipping optimism in 2021. However, market sentiment cannot be allowed to overshadow the urgent need to prioritize the vaccination of seafarers.

As a business with 160 years of marine insurance history, North P&I Club has witnessed its fair share of challenges for the shipping industry. Few - if any - compare with COVID-19 in terms of the dramatic impact on all of us. Fortunately, we believe that the lessons learned in 2020 inform our responses to the challenges of 2021.

Safety in the workplace is a human right, while medical care and the freedom to travel home should also be non-negotiable. For an industry whose workers must cross borders safely to do their jobs, it is critical that political, business and regulatory interests show leadership in addressing the moral imperative, whose significance is reinforced by the contribution of seafarers to the world economy.

North welcomes moves by 46 IMO member states to grant key worker status to seafarers, which in turn should help expedite vaccinations. However, we strongly urge more administrations to follow suit. Seafarers cannot simply work from home to stay out of harm’s way until approved vaccines are available.

We also call for the fast-track development of the “digital vaccine passport” discussed at the World Economic Forum. We believe its circulation to seafarers who help keep the world supplied with food, fuel, raw materials and vital medical supplies should be considered a necessity rather than a “best practice.”

North is also supporting the recently announced Neptune Declaration on Seafarer Wellbeing and Crew Change, which aims to overcome these challenges by enabling crew changes and repatriation through shared responsibility.

We are also doing our utmost to address other 2020 events whose consequences will be felt through 2021. With the frequency of cyberattacks on shipping increasing through 2020 and coinciding with Covid-19, we now offer a portfolio of services, guidance and online support to ensure the cyber resilience for our members transitioning to the new IMO safety management system regime.

November’s U.S. election and the transition of power continue to dominate the news agenda, but our sense at North is that the current U.S. regime on sanctions is “here to stay,” irrespective of the occupant of the White House. Our priority now is for open, consistent and constructive dialogue between the shipping industry and Office of Foreign Assets Control administrators.   

The last days of 2020 also saw the UK and the EU arrive at a trade deal, and here the final outcome for UK-domiciled financial service companies may have to wait a further three to six months for greater clarity. Where North is concerned, however, we are fully prepared for all scenarios.

From the underwriting perspective, 2020’s events bring lessons for 2021. North has consistently argued that premiums are overdue for correction, following several years when they have not kept pace with market realities. While North’s own members’ claims were moderate during 2020, the combined value of the 16 International Group pool claims logged is significant. North has already offered full transparency on its intention to seek a 10 percent General Increase for the 2021/22 policy year. 

North remains financially strong and stable, and its 2020 experiences have also once more vindicated its strategy of diversification as a global marine insurer. This year, we expect strong growth in fixed premium P&I, hull and machinery and aquaculture, especially following the successful integration of Sunderland Marine.

Paul Jennings is the Chief Executive of North P&I Club.