SHIP INSURANCE PREMIUMS, DEDUCTIBLES RISE SHARPLY

SHIP INSURANCE PREMIUMS, DEDUCTIBLES RISE SHARPLY

The cost of insuring ships is climbing sharply, with some premiums up by between 30 percent and 50 percent on year-earlier rates, according to leading marine underwriters.

But even more dramatic is the increase in deductibles, the amount that claimants must pay out of their own pockets. In some cases, these have tripled or quadrupled, said Roger Nixon, a marine underwriter at Cornhill Insurance PLC and chairman of the Institute of London Underwriters' Ocean Hull Committee.David Begley, assistant group marine manager at Commercial Union Assurance Co. PLC, agreed that the sharp rise in deductibles has been one of the main features of the strengthening marine insurance markets. There have even been reports of five-fold increases in deductibles in markets that were slow to start tightening up marine insurance terms.

A combination of concern about the age of the world fleet, the high number of casualties involving bulk carriers and a reduction in the number of companies writing marine insurance cover is contributing to the rising cost of insuring ships, according to Mr. Nixon.