While remaining relatively guarded on the Hanjin case because claims are still ongoing, panelists said one key takeaway is the relevance of systemic risk that it highlighted.
"I guess a lot of us are on a steep learning curve as to what the ramifications are," said CNA Hardy senior marine underwriter for Asia Greg Dodds.
"Imagine what would happen if a company like Maersk were to go bankrupt," International Union of Marine Insurers president Dieter Berg asked. "This would be a big problem for the underwriting side," he noted.
For Generali Hong Kong global head of marine Alvin Chan, the question was whether this would lead in turn to cargo underwriters having to underwrite credit risk of the carriers in future with clients asking for changes in policy wording in the wake of this case. "The implications are far reaching, we don't know what we're getting into and if Hanjin is not the last major carrier to go down what will happen," he postulated. "As cargo underwriters I don't think we think enough about this kind of exposure," he concluded.
Meanwhile for Berg, the Tianjin explosions highlighted the risk of accumulation in the current cargo insurance market. "Increasing values of transported goods combined with a higher quantity of goods being moved is really an accumulation problem we are facing," he said.
Pointing out that there were claims on some 68,000 cars from just the Tianjin incident alone, Berg said nobody would have expected such a huge loss. "It's very difficult to estimate," he added but conceded that at some $2.5bn to $3.5bn this could be the biggest single loss ever seen.
"The problem is how we cope with the ongoing accumulation of ships which are getting bigger and bigger and the value per ship is going up massively," he said. "You really have to get an understanding of what you're insuring but it's difficult for us because we're insuring moving targets, unlike the property market," Berg concluded.
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