A group of eight marine insurers has released the first Annual Disclosure Report for Poseidon Principles for Marine Insurance , disclosing the climate alignment of their hull and machinery portfolios.
The report surveys the portfolios of the framework’s signatories in what has been described as a ‘landmark step’ forward towards transparency in the maritime and insurance sectors.
Namely, the data is expected to be used as a stepping-stone for the signatories to engage their clients in a discussion about climate change, technology, and new risks.
On average, the signatories’ portfolios are 12.7% above being aligned with reaching the UN maritime-goal of at least 50% reductions of the annual greenhouse gas emissions from international shipping by 2050, compared with their level in 2008.
The second trajectory the signatories track is more ambitious and has a goal of zero CO 2 emissions in the middle of this century. The simple average score of the 100% CO 2 emission reduction track is 20.8% above alignment.
This means that on average the signatories’ H&M emissions were 12.7 percent higher than what they should be to reach the IMO goal, and 20.8 per higher than what is needed to reach the Paris Agreement.
The calculations were based on fuel consumption data from 2021, and did not cover the signatories’ entire hull and machinery portfolios.
“This level of transparency is a major milestone on our journey to decarbonise the maritime industry,” says Patrizia Kern, Chair of the Poseidon Principles for Marine Insurance initiative and Marine Strategy Advisor – CEO Office at Swiss Re Corporate Solutions.
“It is evident that there is work to do, but hard data and transparency is a necessary first step,” Kern says.
“We know there is room for improvement, both in our climate alignment score and in the data collection process itself, but that is why we wanted to be part of the Poseidon Principles for Marine Insurance. This is a journey we are on to learn and improve, and together with our clients, I am confident we will make the necessary progress,” said Rolf Thore Roppestad , Gard CEO and Vice Chair of the PPMI.
Gard’s portfolio’s carbon emissions are 8.3 percent higher than the IMO’s decarbonisation trajectory, which aims for a 50 percent reduction in carbon emissions by 2050. Compared to the more ambitious Paris Agreement, which has a goal of zero carbon emissions by the middle of this century, Gard’s portfolio is 16.6 percent above target.
For 2023, the ambition of the Poseidon Principles for Marine Insurance is to get more members to join the principles, increase the contribution volume from the insurance clients and improve access to data.
The very foundation of the maritime insurance sector is changing, according to the signatories, because the maritime industry has begun its transition away from the monolithic oil-based combustion technology towards a future with a wide array of propulsion technologies and energy sources. Therefore, each company within the marine insurance sector must understand what they will insure in the future and how new ship technology will work.
“The insurance companies are only one component in a complex ecosystem, but while engaging with our clients we can become levers of change,” Kern says.
Reporting Signatories: Fidelis MGU, Gard, Hellenic Hull Management, Navium, Norwegian Hull Club, SCOR, Swiss Re Corporate Solutions and Victor Insurance.