In the latest Alongside podcast, Nick Rowe, Head of Strike & Delay at NorthStandard, sat down with Columb Strack of S&P Global Market Intelligence to discuss the impact of the big geopolitical changes in the world, how the landscape has shifted since 2020 and its impact on the insurance industry.
When COVID hit in 2020, insurers found themselves in a new situation. “Ordinarily, the risk is on our radar,” said Nick Rowe. “In the case of the pandemic, we found ourselves insuring the impact of a risk, which had never really been contemplated on such a large scale, advising members and clients how to manage their exposure to it, and indemnifying them for their losses.”
“The whole framework that we were working with in the last 20 years or so, that’s been broken down, first economically by COVID and then geopolitically by Russia’s invasion of Ukraine,” said Columb Strack
Columb is Head of Global Cargo Risk at S&P Global Market Intelligence, which provides forward-looking actionable intelligence and risk quantification on political and security risks affecting marine and other sectors.
S&P Global uses an open-source intelligence infrastructure to undertake indicator-led forecasting. This involves collecting, structuring and analysing any information that might indicate a change in risk.
The impact of war on insurance
The war has significantly impacted shipping in both the Sea of Azov and the Black Sea, particularly at frontline ports like Kherson and Mykolaiv. According to Columb, about 60 vessels and 300 crew members have been stuck in Ukrainian ports since the start of the war.
Additionally, Columb outlines how there are potentially hundreds of mines floating freely in the Black Sea after breaking free from their anchors, which will threaten shipping in the area for years to come. Many have been discovered washed up in neighbouring countries and as far as Georgia, adding a new cause for concern for operations in the area.
Beyond initial expectations, Ukraine has so far kept Russia at bay. However, Columb explained that neither side currently has the military capability to achieve a definitive victory in the 12-month outlook.
“We’re expecting a war of attrition in the coming months with heavy losses on both sides,” he said. “That will probably get to a point where it just becomes politically unsustainable for both governments and eventually results in some sort of de facto ceasefire.”
Source: NorthStandard
Source: NorthStandard
The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.
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