Wednesday, 27th January 2021
Annual Summary 2020/21
2020 has been a year unlike any other. From a shipping industry perspective our thoughts first turn to seafarers, many of whom have been stranded on their ships, unable to get home despite the best efforts of IMO, ICS and other industry associations, including the Group, to encourage governments to recognise the importance of seafarers in keeping global trade and supply chains operational. Those efforts are ongoing, particularly with regard to seafarers being prioritised for early vaccination.
Thanks in no small part to those seafarers, the shipping industry is emerging into 2021 in a resilient way. Back in January 2020 we talked about how Brexit, global trade uncertainty, the escalation of sanctions in the maritime sector and an increasing focus on environmental issues such as the impact of IMO 2020 on sulphur emissions, might cause disruption in 2021. Little did we know that the shipping industry would have to adapt overnight as a result of the restrictions imposed by the COVID-19 pandemic.
The Group has always been responsive and innovative in the face of the ever-changing needs of shipowners and whilst the underlying three core objects of the Group remain largely unchanged from the original concept there have been some other key areas of focus for the Group over the last 12 months:
- COVID-19 has had a significant effect on the cruise industry but otherwise average freight rates for shipowners were consistent in most respects with 2019 (2% down year on year overall) (source: Clarksons), with freight carried reaching about 96% of expected levels.
- With support from the Group’s long-term partners in the reinsurance world, the Group Pooling and GXL Reinsurance contract structure has now been successfully renewed for the 2021/2 policy year with rates only marginally up, providing some measure of stability and comfort to shipowners. Having looked at the long term records of different vessels types a decision was made to add a fifth category, splitting Fully Cellular Container vessels away from other Dry vessels; and that there should be an adjustment to reflect the improved record on Persistent Oil Tankers. See press release here
- As to the headwinds in the global economy, the US/China situation remains a concern for the facilitation of global trade, but we await with interest to see how the incoming Biden administration will approach sanctions in 2021.
- The sustainability of marine insurance, and the shipping industry generally, in a more environmentally sensitive world is going to be a key issue for the Group going forward and the Group will support shipowners as they navigate the transition to new fuels and the global move to decarbonise.
- As big data and digitalisation drives greater efficiency the Group will use its collective expertise to help shipowners to develop a safety focussed and quality driven approach to the innovations and new systems driving change in the industry. By way of example the Group has approved 6 electronic bills of lading platforms and has several more under consideration.
A final word. We ran a series of webinars to Group Club correspondents in Latin America in 2020 which were extremely well attended and proved that the International Group “family” extends so much wider than its constituent Clubs. We are extremely grateful for the Correspondents’ continued support as we strive to solve shipowners’ liability issues and keep global trade moving around the world every day of the year.