New marine insurance syndicate launches to protect Asian shipowners from war
A new marine insurance facility designed to protect Asian shipowners from war-related risks has been launched in Hong Kong.
The Hong Kong China War Risk Syndicate (HKCWRS) is backed by Asia Insurance, part of Hong Kong-based Asia Financial Holdings, along with a number of other insurers including China Taiping Insurance (Hong Kong) Ltd that are backing the syndicate in a subscription format.
The facility will provider cover for acts of war, piracy and other perils for all Asian flag-owned, managed or chartered vessels with a maximum limit per hull of $100m.
“We believe the time is right for such a facility to be made available for Chinese and other Asian shipowners,” said Winnie Wong, Hong Kong chief executive officer of Asia Insurance.
“It is important that as this fleet grows, owners have a range of options available for their insurance needs. We aim to support Hong Kong as a leading marine insurance market and this is the first step on our journey.”
The syndicate has in part been inspired by China’s Belt and Road initiative, which will see a massive amount of infrastructure projects launched in the next decade as China looks to develop its regional trade links.
Already, China and Hong Kong together form one of the world’s biggest shipping registries and Asia is home to 40% of the world’s fleets, as well as many of the largest ports. The Belt and Road-related projects are only likely to strengthen the status of these ports as key trading hubs.
However with latest global report on piracy from the International Maritime Bureau highlighting Southeast Asia as a particular concern and the risk of conflict in Asia heightened by ongoing geopolitical tension, not least in the disputed waters of the South China Sea, marine risk is a key concern.
The syndicate has stressed that its coverage is not dependent on a formal declaration of war before it can be enacted. And it also covers related perils such as rebellion, insurrection, derelict mines and torpedo strikes, civil commotion, confiscation, restraint and detainment by a ruling power.
The HKCWRS offering will also include a War Risk Committee made up of local shipowners, underwriters, brokers and security specialists who will convene to discuss, review and respond to marine risk issues and incidents, and to recommend whether security services or armed guards should be deployed onboard vessels.
The HKCWRS has been welcomed by the Hong Kong Ship-Owners’ Association’s new chairman Jack Hsu, the Hong Kong Federation of Insurers, the HK Transport & Housing Bureau and the HK Maritime and Port Board in Hong Kong, as well as various maritime law firms, banks and insurance brokers.