Saturday, 28 January 2012
Insurers Ask For Better Safety Procedures on Passenger Ships
The grounding of the Costa Concordia cruise ship could end up being the costliest marine disaster in history, at least for the insurance companies. Because of this, Ole Wikborg, the International Union of Marine Insurance’s president, said that operators of passenger ships need to improve their safety standards as well as the training provided to crew members to prevent this type of thing from taking place again.
Speaking to reporters at a London press conference, Wikborg said some of these issues have been brought up and discussed in the past, such as the competence of the crew, stability issues, safe navigation methods, and the evacuation procedures. He added that the insurance industry feels it’s time the regulations regarding shipping were changed or improved.
There were more than 4,000 total passengers and crew on the Costa Concordia when it ran aground off the coast of Italy and killed at least 16 people on January 13. Shipping experts and insurance analysts said it may cost as much as $1 billion to the insurers. If that figure is true, it’ll be costlier than the cleanup of the huge oil spill that took place in 1989 when the Exxon Valdez crashed in Alaska.
According to an article by Business Insurance, the International Maritime Organization said the safety rules for these passenger vessels need to be looked at closely, but it’s believes that not all shipping executives are on board with this idea and aren’t in a hurry to change things. The biggest concerns are regarding the quality of training that some of the crew are given, especially those who work in the hospitality and entertainment areas of cruise ships. It was reported that about 66 per cent of the crew on the Costa Concordia worked in these departments.
Wikborg said the crash of the Concordia doesn’t guarantee that shipping insurance costs will rise since it might not affect many underwriters. If this is the case, then there won’t be any incentive for the entire market to tighten things up. However, some analysts and underwriters have said that the Concordia disaster could mean the marine insurance industry will lose money for the year even though 2012 has just started and this will force insurance companies to raise their rates.
