JOY ORLEK CARGO OWNERS should brace themselves for an increase in insurance premiums in the year ahead as the impact of the MSC Napoli disaster begins to filter through. That’s the view of Frank Ponnen, CEO of Associated Marine, a division of Santam, who says that concerns have been raised by reinsurers regarding the level of premiums in relation to risk. “The Napoli will be a test for the market and will separate the men from the boys,” says Ponnen. “The last figures on the Napoli estimate that the loss will be in excess of R700m. Underwriters need to look at their market share and then calculate their true commitment on this vessel. It will be a bad year for underwriters and reinsurers. “Last year we had the loss of the Safmarine Agulhas, and although we weren’t that badly affected, to be hit with another big claim – where you’re talking of salvage costs in excess of 60% – in the first few weeks of January, is a blow.” Ponnen believes it should serve as a lesson for underwriters to re-evaluate their underwriting criteria. They also need to take into account the attritional losses – the hijackings, containers and cargo disappearing at ports and airports, and the recent heists, says Ponnen. “The value of cargo losses is far in excess of normal expectations, and hijacking is on the increase. “Against this background, it’s up to the cargo owner and logistics companies to play a more proactive role,” he added. And often this amounts to pure common sense. “Customers who do take proactive steps will see the benefit by way of reduced premiums.”
