Rick Salway, Ocean Marine Division – Luxury Yacht, and member of the IUMI Inland Hull, Fishing Vessel & Yacht Committee, gave an underwriting view to the Inland Hull, Fishing Vessel & Yacht Market in the lates IUMI Eye.
He said that, as a North American marine underwriter, it became routine to check the National Hurricane Center website for activity in the Atlantic Storm Basin between the months of June and November; however, Mother Nature has a fickleness that cannot be predicted and defined.
This July, Aon reported that the first half of 2019 saw a reduction in insured catastrophe losses to $20bn, the lowest level since 2006. That in itself might contradict the impact of climate change. Looking deeper, they reported that economic losses were approximately $73bn, or 3.5 times more than the insured losses. Only about 42% of the global economic losses were insured – compared with 52% in the first half of 2018 – as several large-scale disaster events occurred in areas with low insurance penetration according to the report by Swiss Re Institute.
Salway asked what this meant in the world of inland hull, fishing vessels and yachts? He said that, beyond the hurricanes and cyclones, there was an increase in insured losses that were attributable to secondary catastrophic perils such as thunderstorms, snowmelt and torrential rain.
“Ask any yacht underwriter about the impact of lightning on modern watercraft. Losses that hovered around $250,000 are now approaching $1m due to sophisticated electronics and machinery”, he said
Meanwhile the Mississippi River experienced perhaps the perfect storm of flooding which started in early 2019. Between the snowmelt in its northern reaches and heavy sustained rains to the south, one parish in Louisiana recorded 214 days of flooding, which was by far the longest period since 1927. This caused damage to inland hull and barges, and prevented transit as parts of the river were closed to navigation.
In the Netherlands, two major barge associations started an inquiry to investigate economic effects on the inland hull sector and indirect effects on the sectors who depend on that, due to low water problems, said Salway.