Suez blockage may lead to large reinsurance claims, broker Willis Re says

Simplicissimus 2/04/2021

Egypt Suez Canal Authority May Seek $1Bln ’Ever Given’ Ship Crisis Compensation - Bloomberg
▻https://www.bloomberg.com/news/articles/2021-04-01/egypt-may-seek-1-billion-in-compensation-for-suez-canal-crisis

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• ‘This is the right of the country,’ says Canal Authority chief
• Ship blockage caused the nation to lose revenue, says SCA
Egypt said it may seek around $1 billion in compensation after a giant container vessel blocked the Suez Canal for almost a week and roiled shipping markets.
The figure is a rough estimate of losses linked to transit fees, damage to the waterway during the dredging and salvage efforts, and the cost of equipment and labor, the Suez Canal Authority’s chief executive officer, Osama Rabie, said late Wednesday to local television channel Sada Elbalad.
He did not specify who the Canal Authority would seek compensation from.
“This is the right of the country,” Rabie said, adding that the incident hurt Egypt’s reputation. “This country should get its due.”
The 400-meter-long Ever Given ship, owned by Japan’s Shoei Kisen Kaisha Ltd., ran aground on March 23 in the southern part of the canal and was freed six days later.
Taiwan’s Evergreen Marine Corp., the vessel’s charterer, said Thursday it’s not responsible for delays of any cargo it was transporting.
“There is almost no chance that we will be sought to pay compensation,” Evergreen Marine President Eric Hsieh said at a briefing in Taipei.
Shoei Kisen will discuss compensation with the Canal Authority, but will refrain from giving details for now, according to a spokesperson.
Bitter Lake
The ship and its cargo are currently in the Great Bitter Lake, roughly halfway along the canal.
While they could be held in Egypt if the matter of compensation goes to court, such a scenario is unlikely, Rabie said.
It may take until Friday night or Saturday to clear the backlog of hundreds of ships that built up while the canal was shut, Rabie said in a separate interview with Egyptian television.

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Simplicissimus 2/04/2021

Suez blockage may lead to large reinsurance claims, broker Willis Re says | Reuters
▻https://www.reuters.com/article/us-reinsurance-marine-idUKKBN2BO4PN

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FILE PHOTO: A view shows Ever Given container ship in Suez Canal in this Maxar Technologies satellite image taken on March 29, 2021.
Satellite image ©2021 Maxar Technologies/Handout via REUTERS

The blockage of the Suez Canal is likely to lead to large reinsurance claims, adding to upward pressure on marine reinsurance rates, James Vickers, chair of reinsurance broker Willis Re International, told Reuters.
Formal investigations began this week into how the giant container ship Ever Given ran aground in the canal, shutting down shipping in the major global waterway for almost a week.
The incident and its impact on hundreds of ships delayed in the canal would be a “large loss” for insurance market Lloyd’s of London, its chairman Bruce Carnegie-Brown said this week, while Fitch Ratings said global reinsurers were likely to face hundreds of millions of euros of claims.
Vickers also said reinsurance losses were “not going to be a small amount of money”. The blockage was the latest in a growing number of man-made disasters leading to reinsurance losses, on top of a list of natural catastrophes in the past year, he said.
Reinsurers help insurers cover claims for major events such as hurricanes, in return for part of the premium. Reinsurers typically raise rates after they experience large losses.
Even before the Suez incident, the marine market “didn’t need much encouragement to keep going in an upward direction”, Vickers said.
Global marine reinsurance rates were generally seeing “high single digit” percentage point increases, Willis Re said in its April reinsurance renewals report on Thursday.
Marine reinsurance premiums have been rising for the past few years after several years of falling rates, as Lloyd’s of London and other firms have cut back on loss-making lines, reducing competition. The COVID-19 pandemic has also put upward pressure on reinsurance rates across the board.
Elsewhere, the U.S. property reinsurance market has been hit by a number of catastrophes including Winter Storm Uri in the United States in February, with rates up by as much as 25% in April, the report showed.

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