Page 33 - Insurance Times August New 2023

The Impact of

Geopolitical

Uncertainties on

Marine Insurance Rohit Boda
Group Managing Director
J. B. Boda Group

Marine insurance offers financial security against perils such as natural disasters, piracy, collisions,
and theft, among others. By providing compensation for the loss or damage of goods, it helps
facilitate smooth and efficient trade by minimizing financial risks and ensuring the continuity of
supply chains.

arine insurance plays a vital role in global trade, Recent geopolitical events have demonstrated the profound
M providing protection against risks associated impact they can have on global trade. For example, the
with the transportation of goods by sea. It
ongoing conflict between Russia and Ukraine has caused
serves as a safeguard for businesses involved disruptions in the region, affecting trade routes and
in international shipping, ensuring that losses or damages increasing risk for businesses. The trade conflict between the
incurred during transit are covered. Marine insurance offers United States and China resulted in the imposition of tariffs
financial security against perils such as natural disasters, on a wide range of goods, leading to disruptions in supply
piracy, collisions, and theft, among others. By providing chains and increase cost for enterprises. The imposition of
compensation for the loss or damage of goods, it helps economic sanctions on countries like Iran and Russia altered
facilitate smooth and efficient trade by minimizing financial trade dynamics and influenced the availability and cost of
risks and ensuring the continuity of supply chains. insurance coverage.

On the other side, geopolitical unpredictability poses Geopolitics uncertainties can significantly impact the marine
significant challenges for sectors like maritime insurance, insurance sector, introducing new challenges and
upsetting patterns of global trade and creating new dangers. complexities that require careful navigation. Exploring into
These uncertainties stem from political conflicts, trade wars, the implications of geopolitical uncertainties on marine
sanctions, and other events. Political conflicts involve insurance, shedding light on the various ways this vital industry
territorial disputes, ideological differences, and rivalries, while is influenced by global political dynamics.
trade wars involve tariffs and protectionist measures.
Economic sanctions imposed by one nation on another restrict Heightened Risk Perception and
trade and financial transactions, leading to market disruptions
Premiums
and elevated risks for businesses. These events can alter risk
profiles and require marine insurers to reassess underwriting It can trigger a heightened perception of risk within the
practices and adapt to changing circumstances. marine insurance sector. Factors such as political instability,

26 August 2023 The Insurance Times