By Mike Wackett (The Loadstar)– With CMA CGM apparently prepared to authorize a letter-of-intent for 9 ultra-large container vessels (ULCVs) of 22,000 teu, insurance providers are coming to be significantly worried that their direct exposure might be as well focused.

At a seminar in Seoul, South Korea, today, shipbuilder Hyundai Heavy Industries (HHI) exposed it remained in competitors with a Chinese backyard for the order from the French provider.

So much CMA CGM has actually decreased to comment, however has actually not refuted the records, something it has actually fasted to do in the past when connected spuriously to large ship orders.

Notwithstanding lining sector worries that the field is currently overtonnaged, the possibility of yet even more leviathans being taken into solution has actually reignited the worries of insurance providers.

In a LinkedIn post today, Michael Hauer, head of aquatic reinsurance for the Singapore branch of Munich RE, states the insurance policy sector requires to attempt to comprehend the most likely direct exposure when– not if– a ULCV enters difficulty.

Indeed, when the 2008-built 8,110 teu MOL Comfort damaged its withdraw the coastline of Yemen in 2013, causing a failure of the ship and also 4,380 containers, the insured freight loss was reported at some $300m.

Marine insurance providers generally compute their typical direct exposure per box at $50,000-$ 100,000, however Mr Hauer stated quantities taped for solitary containers shed from the MOL Comfort were significantly greater.

Mr Hauer stated the development in dimension of containerships, greater than dual in the last years approximately, additionally implies that historic big loss worths “must be called into question”.

He stated: “We have long recognized and also approved that for sure trades/commodities we can anticipate high-value products to be in a solitary box, perhaps even right into the millions– however certainly we are chatting reduced single-digit millions, are we not?

“We are aware that these expectations are, for a number of – largely perishable – commodities, becoming increasingly unrealistic. We are aware of a number of instances where the value of a single pallet can be $1m or more.”

Mr Hauer took place to note some instances of solitary container losses, consisting of a vehicle crash including a freight of drugs causing a case for around $50m.

“Values of these products within a single 40ft reefer container regularly reach $50m,” created Mr Hauer that also recommended that the number is “possibly conservative”.

“We can only begin to find answers to manage these large exposures if we understand them.”

He said that the insurance policy sector might not “continue making assumptions based on what has gone before”.

“Too much has, and is, changing. If we as underwriters do not recognise and manage these trends, it is certain that our capital providers will,” advised Mr Hauer.

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