Recent ship accidents off the Kerala coast are poised to affect cargo insurance providers, although the impact on soft cargo premium rates may be limited. The incidents involved feeder vessels carrying goods from various owners, which lessens Indian insurers’ exposure. However, vessel owners may face increased costs, particularly for hull and protection & indemnity (P&I) insurance.
Details on the insured cargo values of the involved ships remain unclear. Indian insurers reported Rs 5,535 crore in gross premium for the marine insurance segment in FY2025, with Rs 3,940 crore allocated to marine cargo insurance. Importantly, it is unlikely that Indian insurers have exposure in the hull insurance for these two vessels. Insurance categories include cargo, hull & machinery, and P&I, which covers liabilities like pollution from spills.
The MV Wan Hai 503, which experienced a fire, was transporting cargo from Colombo to Mumbai. Meanwhile, the MSC ELSA 3 sank off Kochi on May 25, carrying 640 containers, including hazardous materials and significant amounts of fuel, raising environmental concerns.
Marine insurance safeguards against risks such as damage and theft during transport, with premiums reflecting shipment value and risk factors. Policies can be tailored to cover specific cargo types and routes, ensuring businesses protect their financial interests in trade.
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