Marine insurers’ portfolios not in line with climate goals: report

EIGHT marine insurers have published data to understand how their hull and machinery insurance portfolios are tracking against the shipping industry’s climate targets.

Insurers Fidelis MGU, Gard, Hellenic Hull Management, Navium, Norwegian Hull Club, SCOR, Swiss Re Corporate Solutions and Victor Insurance are all signatories to the Poseidon Principles for Marine Insurance.

The signatories gathered client data in 2021 for the Poseidon Principles Annual Disclosure Report 2022, the first of its kind for the marine insurance industry.

Signatories’ portfolios were found to be, on average, around 12.7% out of line with the IMO goal trajectory, and 20.8% out of line with the Paris Agreement trajectory.

The Global Maritime Forum described the data and report as a steppingstone for the insurers to engage clients in a discussion about climate change, technology and new risks.

Patrizia Kern, chair of the Poseidon Principles for Marine Insurance initiative, noted the report’s focus on transparency.

“This level of transparency is a major milestone on our journey to decarbonise the maritime industry,” she said.

Signatories’ data was positioned on two climate trajectories: the International Maritime Organization goal of cutting GHG emissions by at least 50% by 2050, and the Paris Agreement goal of zero emissions by the middle of this century.

“It is evident that there is work to do, but hard data and transparency is a necessary first step,” Ms Kern said.

Rolf Thore Roppestad, vice chair of the initiative and CEO of Gard (which claims to insure around 50% of the global merchant fleet), said the insurer and its clients were working to learn and improve.

“We know there is room for improvement, both in our climate alignment score and in the data collection process itself, but that is why we wanted to be part of the Poseidon Principles for Marine Insurance,” he said.

In 2023, the Poseidon Principles for Marine Insurance aims to see more members join the principles, increase the contribution volumes from insurance clients and improve access to data.

“The insurance companies are only one component in a complex ecosystem, but while engaging with our clients we can become levers of change,” Ms Kern said.

The Global Maritime Forum established the Poseidon Principles in 2019 as a framework to assess and disclose whether financial institutions’ lending portfolios were in line with climate goals.