The marine cargo insurance industry is bracing to meet expected upswing in multidimensional risks across product lines. Amongst the emerging risks that are becoming increasingly prominent are cyber theft and climate change. Understanding these risks will help marine, cargo and logistics companies navigate the complex and evolving world of risk.
Cyber attacks have become a growing concern. As vessels are increasingly equipped with advanced technology in navigation, piloting and cargo loading/unloading; cyber risks may take the form of immediate damage from cyber attacks as well as potential disruption to the onwards supply chain. For example, cyber criminals may hack into a carrier's computer system to learn where the cargo is heading to in order to intercept it. Cyber criminals may also assess sensitive information and wreak havoc on port terminal operations.
As for climate change risks, the United Nations Conference on Trade and Development states that climate change will have a substantial impact on the maritime industry in terms of rising sea levels, increasing sea surface temperatures and the frequency of extreme weather events (such as hurricanes, typhoons and cyclones).
In North Atlantic alone, cyclone intensity has visibly increased over the last two decades. All these will have a significant impact on the safety and operations of marine cargo ships. With the frequency and ferocity of hurricanes and cyclones increasing year on year, this has caused greater damage and loss to cargo ships and their cargoes as well as losses due to shipping delays. These factors pose challenges to logistics and shipping companies. Melting ice caps will also have a significant impact on the maritime industry as this would potentially create new shipping routes and make others inaccessible.
In today’s world of increasingly complex supply chains and climate change, businesses in the marine industry face a plethora of new risks. Hence, companies should work with their insurance/reinsurance brokers to understand (and insure against) these emerging risks.
For more information about our marine cargo coverages, please contact us at info@mandarinre.com or call us at +603 9212 7273.