The second Poseidon Principles for Marine Insurance (PPMI) annual report indicates its signatories are slipping behind in their attempts to align with the International Maritime Organization’s decarbonisation goals.
Overall, the PPMI found in 2022 that on average its 10 signatories were performing 13.6% above the pathway to achieve the IMO’s goal for a 50% reduction in carbon emissions by 2050, compared with 12.4% in the previous year.
In terms of achieving the IMO’s revised goal of net zero by 2050, the PPMI was on average 23.8% behind, compared with 20.8% in the previous year.
The PPMI described the latest results as “not very different” from the previous year.
However, the PPMI warned against making a direct comparison year on year because the hull and machinery policies are renewed annually and often accounts are moved.
“It’s important to note that the portfolios of signatories change from year to year, so it’s not feasible to make a direct comparison between scores,” the PPMI said.
The climate change initiative launched in 2021 is still in its early stages, but the outcomes are likely to raise concerns for participants, including some of the world’s leading marine insurers.
The PPMI said that its signatories are still developing their decarbonisation strategies.
“As this is only the second time signatories have been through the reporting process, it is an important stepping stone in furthering sustainability work and developing actions to eventually improve scores through better access to data and increased knowledge, combined with the adoption of more efficient vessels and alternative fuels,” the PPMI said.
There are in total 10 signatories to the PPMI. Reporting insurers include Gard, Swiss Re Corporate Solutions, Fidelis MGU, Hellenic Hull Management, Navium, Norwegian Hull Club, SCOR, Victor Insurance, Skuld and AXA XL.
The strongest performer was AXL XL, with an insurance portfolio which was 2.9% above the 50% goal and is 12% above the 100% goal.
AXA XL’s global marine chief underwriting officer Anne Marie Elder said: “The Poseidon Principles for Marine Insurance annual disclosure is more than numbers; it’s the insurance industry’s commitment to a sustainable maritime future. This landmark initiative propels us forward on the voyage towards decarbonisation, with data serving as our compass.”
Norway’s Gard scored 6.8% above the 50% goal and 16.2% above the 100% goal. Chief executive Rolf Thore Roppestad said: “The development in our alignment score only confirms that there is still work to be done.
“Even so, we are grateful for the engagement shown by our customers in this year’s data collection process, and we will continue to work towards further simplification and streamlining of the process.
“As a shipowner-controlled mutual, we are acutely aware and constantly reminded about the importance for our customers to decarbonise. Gard remains committed to supporting its clients in this transition.”
PPMI chair Patrizia Kern said the climate change initiative is playing a vital role in improving transparency in the industry.
“We recognise the immense challenges ahead to decarbonise international shipping, which can only be achieved if all actors are on board.
“Marine insurers play an important role in the transition to net zero by providing support and risk mitigation the industry needs to adopt new fuels and technologies,” she said.
