Executive Briefings

Insurance Industry Eyes Increased Risks Expanded Panama Canal Brings

The Panama Canal accounts for roughly five percent of world sea trade, and the expanded Panama Canal is estimated to generate a three percent increase in cargo volumes transiting the canal.

Insurance Industry Eyes Increased Risks Expanded Panama Canal Brings

The value of insured goods transported will increase with the expanded canal. This could result in an additional $1.25bn in insured goods passing through the canal per day. Risk accumulation will increase, says Allianz Global Corporate & Specialty (AGCS) in a report on the Panama Canal expansion project.

“With the increase in size of vessels transiting the canal, you have a corresponding increase in operational, environmental and commercial risks,” says Andrew Kinsey, senior marine risk consultant at AGCS. Bigger ships automatically pose greater risks in that the sheer amount of cargo carried dictates that a serious casualty has the potential to lead to a sizable loss and greater disruption. Increasing traffic of bigger ships means the amount of diesel and petroleum being transported could also pose a heightened pollution risk in the event of a casualty.

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The value of insured goods transported will increase with the expanded canal. This could result in an additional $1.25bn in insured goods passing through the canal per day. Risk accumulation will increase, says Allianz Global Corporate & Specialty (AGCS) in a report on the Panama Canal expansion project.

“With the increase in size of vessels transiting the canal, you have a corresponding increase in operational, environmental and commercial risks,” says Andrew Kinsey, senior marine risk consultant at AGCS. Bigger ships automatically pose greater risks in that the sheer amount of cargo carried dictates that a serious casualty has the potential to lead to a sizable loss and greater disruption. Increasing traffic of bigger ships means the amount of diesel and petroleum being transported could also pose a heightened pollution risk in the event of a casualty.

Read Full Article

Insurance Industry Eyes Increased Risks Expanded Panama Canal Brings