Indian Ocean: No Insurance Premium Reduction Likely
By Aiswarya Lakshmi
Tuesday, November 17, 2015
In October a number of trade bodies released a joint press release to formally announce a reduction of the High Risk Area (HRA).
Insurance companies have said the reduction may not result in reduced insurance costs due to the assessment of insurance risk being dependent on such a wide and varying range of factors.
"The Joint War Committee's (JWC) insurance notification area has always been different from the BMP/HRA and remains separate and unchanged for now. The JWC is scheduled to meet in December and will be mindful of the roundtable actions. It is impossible to say what action they will take, if any," said Neil Roberts from Lloyds Market association.
The JWC and other insurance agencies kept their list of areas considered prone to piracy, terrorism and related perils unchanged during a review in September 2015.
PVI comment: "The stance taken by JWC emphasises the importance of individual voyage risk assessments. Regardless of official advice, it's critical that owners and operators review the current and route specific circumstances in order to implement the appropriate measures."
The group of organisations agreed to India's efforts to alter the boundaries of the HRA for piracy from 78 degrees east longitude to the 65 degrees east longitude. The new industry advice will take effect from 1 December.
While reducing the limit of HRA, the roundtable of shipping and oil industry "stressed that a serious threat remains and that correct reporting and vigilance remains crucial".