Facing a Changing World

Transcription

1 Facing a Changing World Christine Dandridge Atrium Syndicate 609 Lloyd s of London Prepared with the advice of Exclusive-Analysis.com

2 The World before 9/11 Wars were between states or were contained in regions i.e. the Balkans Convoys could protect shipping. The immediate post Cold War period was highly idealistic. (New World Order). War Risks Insurance was treated as a commodity. The level of risk was seen as uniform. Underwriters had more capacity. Too much Information not enough understanding. WW2 Convoy Armilla Patrol

3 After 9/11 The emergence of well funded non-state actors with few constraints. New Risks: Suicide bombers, biological, chemical, radioactive. Widespread anti- Americanism. Relative lack of Insurance Capacity (Weaker Equity markets) WANTED OBL Al-Zawahiri

4 Marine Assets Specific Threats Terrorism Al-Qaeda bought scuba gear (as yet unused) USS Cole (blown up in Yemen) Cruise ships (large groups of Westerners) Peacetime War Claims Seizure of dredgers by Indonesian Navy Hijack of vessels by refugees/displaced persons Liberation Tigers of Tamil Eelam Sea Tigers Threats to Spanish Ferries by ETA

5 Coast Guards secure ports - not cargo. Port Security Initiative US customs agents in foreign ports intelligence sharing Creating trusted partnerships Fast-track for routine cargos help focus effort Cruising is vulnerable: soft target, easy to cause business interruption. Employee screening is problematic. How good is the security? Multi-modal Transport Delivery to heart of a country Container could be shipped Warehouse to White House - Container tracking/scanning technology already exists Port Security

6 Coverage WAR PERILS (Institute Clauses) 281 1/10/83 & 1/11/95 Subject always to the exclusions hereinafter referred to, this insurance covers loss of or damage to the Vessel caused by 1.1 War civil war revolution rebellion insurrection, or civil strife arising there from, or any hostile act by or against a belligerent power 1.2 capture seizure arrest restraint or detainment, and the consequences thereof or any attempt thereat. 1.3 derelict mines torpedoes bombs or other derelict weapons of war. 1.4 strikers, locked-out workmen, or persons taking part in labour disturbances, riots or civil commotions 1.5 any terrorist or any person acting maliciously or from a political motive. 1.6 confiscation or expropriation.

7 Amended RACE Clause This clause shall be paramount and shall override anything contained in this insurance inconsistent therewith 1. In no case shall this insurance cover loss damage liability or expense directly or indirectly caused by or contributed to by or arising from 1.1 ionising radiations from or contamination by radioactivity from any nuclear fuel or from any nuclear waste or from the combustion of nuclear fuel 1.2 the radioactive, toxic, explosive or other hazardous or contaminating properties of any nuclear installation, reactor or other nuclear assembly or nuclear component thereof 1.3 any weapon or device employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter 1.4 the radioactive, toxic, explosive or other hazardous or contaminating properties of any radioactive material. 2. This clause is subject to English law and practice

8 Liability September 11 th demonstrates that virtually anything is possible Liability depends on Forseability and the Duty of Care arising therefrom Are Port Authorities maritime gatekeepers of homeland security? What is the position of sea-carriers vis a vis the cargos they carry What obligations do cruise operators have to their passengers whilst disembarked? How will traditional theories of liability respond to this paradigm shift? Forum shopping for sympathetic courts will we now see Respondant shopping as claimants widen the hunt for sources of recovery Are these insurable risks?

9 What Next? War on Iraq Iraqi Scuds onto US deployment Ports in the region. Possible Iranian pressure on Hormuz. Tanker War? India/Pakistan Indian Naval blockade of Karachi? Pakistan special forces Submarines may respond. Taiwan Jang Zemin succession uncertainties Chinese acquisition of Naval capability from Russia 1996 Chinese missile tests over Taiwan signal determination. Build up of Chinese short range missiles can threaten shipping.? Iranian Submarine under construction in Russia Indian Chinese Naval Missile(DF-15) air for power use could in Hormuz? Capable enforce an exclusion of Reaching zone Taiwan off Karachi

10 Some International Maritime Flashpoints Southern Caspian Korea Kurile Islands St Pierre and Miquelon Bosphorus Parsely Island Abu Musa/Hormuz Columbia India/Pakistan Spratly Islands Piracy Falklands/Malvinas

11 The Chinese word for Crisis is made by combining the characters for Danger and Opportunity!