Singapore Maritime Week – “The Changing Nature of Maritime Risks”
Our Deputy Managing Partner, John Sze moderated a panel discussion on “The Changing Nature of Maritime Risks” at the inaugural Maritime Services Leaders Forum during Singapore Maritime Week. The distinguished panellists comprised of Nick Shaw, Chief Executive Officer at the International Group of P&I Clubs, Richard Turner, the President of the Union of Marine Insurance UK, Paul Hackett, Joint Head of Marine at Canopius Singapore, and Jonathan Holmes, Head of Hull, Asia at AXA Singapore.
Some of the issues discussed how, in moving toward digitalizing their operations and adopting measures to reduce dependency on fossil fuels, the maritime sector faces a complex web of risks and challenges that are inherently intertwined.
Maritime insurers, for example, have had to develop schemes and products that are fit for purpose when it comes to environmental, social, and corporate governance (ESG) commitments, as well as to measure and ascertain risks arising from use of new types of vessels, or new equipment, or operational methods in an effort to decarbonise.
On the flip side, it also means that certain existing insurance policies and coverage, that have for a long time been fundamental to shipping operations, will soon be weaned out. According to Paul Hackett at the panel discussion, there are distinct areas that will no longer need coverage, these include thermal coal, coal-powered plants, oil and energy exploration.
Insurers will also need to support maritime players as the sector deals with new expectation for net zero carbon emissions. Part of that support will involve aiding ship owners through the inevitable fuel transition. To do that, insurers will need to study and understand the types of fuel available, and work with industry partners to figure out what the new risks might be.
Yet that is not all as insurers also need to now consider the risks that technology and digitalisation create. “New technology means new risk,” said Jonathan Holmes. “As service partners, we need to have products that can provide seamless transition to those new technologies.”
John was later interviewed by Singapore’s flagship news broadcaster, Channel News Asia, on his thoughts around how the maritime players can adapt to the expectations on the industry around decarbonisation.
In the interview, John highlighted the changes and adaptations that shipping insurers need to go through when it comes to new vessels being built for the purpose of decreasing carbon emissions.
“If we look at the use of alternative fuels, then legal frameworks need to be developed for testing and transfer of fuel from supplier to the vessels, to minimize disputes relating to quality and quantity of the fuel supplied. Further, new regulations must also be developed on safe storage and use of the alternative fuels,” said John.
John also spoke about legal frameworks that need to be developed to regulate the new ways of operating. You can watch the full interview here.
What is clear is that a paradigm shift is underway in the shipping industry promising safer, greener and more efficient ship traffic with unmanned, autonomous vessels but the increasing reliance on data and technology, though inevitably, also means that shipping firms and vessels are now more prone to cyber-attacks.
We talked about the types of cyber-attacks and risk in our earlier article here.
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JTJB has specialised in Maritime and International Trade law practice since its formation in 1988. Today, JTJB’s maritime practice is anchored in Singapore with a network of offices across the region to serve the client’s maritime needs in Singapore and in the region. With its experience, specialist focus and dedicated network of trusted legal professionals in this region, JTJB is well placed to serve the maritime sector, and to handle and serve clients’ legal needs anytime, anywhere.