Transiting the Northern Sea Route: Shipping and Marine Insurance Interests

Arctic shipping insurance: towards a harmonisation of practices and costs?

“…A review of literature quickly informs us that considering insurance fares as a major variable in assessing the profitability of Arctic shipping, is not a recent question. As early as 1999, the International Northern Sea Route Programme (INSROP) report and related-articles underlined that shipping companies would have to comply with risk assessment drawn by major insurance companies (Gold 1999; Musin 1999) that appeared to be mainly reactive and not at ease with what definitely was at the time, and still is, a region in which transportation risks are still to be fully assessed (Tamvakis and others 1999). Several articles have stressed the importance of this business dimension, not only because potentially major costs were at stake depending on the risk assessment insurance companies could produce, but also because the norms the insurance firms would set up would partly condition the profitability potential of Arctic shipping: the stricter their demands would be, the more expensive the adaptation could be for shipping firms (Østreng 2006).…”