IUMI 2014 highlights the rise of Asia - 22/09/2014

Eastern markets generate nearly a third of marine business and it’s growing, says Lange

THE International Union of Marine Insurance’s annual conference is the public face of the organisation, and secretary-general Lars Lange is convinced that the 2014 edition, which opens in Hong Kong today, will present the organisation he heads in a progressive light.

New articles of association are due to be adopted, in the hope of making IUMI more nimble and less bureaucratic, while there will be further progress towards its self-selected goals of becoming “more visible and more political”, Mr Lange told Lloyd’s List in a recent interview in London.

“Conference is very important for IUMI. It’s a very good tool to forward information, opinion, to the membership on one side but also to public and press and other parties and stakeholders,” Mr Lange said.

This year the chosen theme is building expertise for a changing world, a topic picked with Asia in mind. The region is an increasingly important focus for the marine insurance business.

That things are moving this way shouldn’t come as too much of a surprise. Marine insurance has always been a service industry, and naturally its centre of gravity tends to shift to where the action is in shipping.

In the past this was of course Europe, and often primarily London. But Asian markets are going from strength to strength.

“It was very important to us to see that we get as much as possible domestic speakers on issues related to Asian markets.

“When you look at the programme you will see that many of the workshops have a close focus on Asian business, trying to understand how the business works, where the challenges are, where the problems are.

“Hong Kong has a special situation. Hong Kong has a challenge nowadays from Shanghai and other Chinese markets. China is certainly aware of this strong power that Hong Kong has in economic terms.”

Yet it visibly remains the case that marine insurance is a eurocentric exercise.

Rising Asia

Of the 13 members listed on the International Group of P&I Clubs, 11 are based in Europe, one is in the US and only the Japan Ship Owners’ Mutual calls Asia home. Meanwhile, Lloyd’s is still the biggest underwriting market.

But new statistics, due for release at the conference, will show strong growth in Asian market share.

These figures will include business written by European companies through their Asian affiliates, but will also reflect the impact of new companies emerging from within Asia itself. Together they account for 20%-30% of the market.

In particular, big Chinese insurance companies such as People’s Insurance Co of China and China Pacific Insurance Co have built large cargo insurance books on the back of that country’s vast exports to Europe and North America.

None of this has happened overnight, but rather gradually over the last decade. If things continue at the same pace, it should not be too long until Asian surpasses the halfway point. But Mr Lange is reluctant to make predictions.

“You never know what markets are going to do over the next year. This all depends on the stability of the countries, political issues and so on. But I don’t think we will see any significant changes in these trends.”

Politics

Meanwhile, IUMI 2014 will also have a political edge; the organisation is keen to make its voice heard on regulatory issues.

These include seafarer training, cruiseship safety, containership stability after the loss of MOL Comfort , firefighting at sea, and places of refuge.

IUMI’s political forum, responsible for regulatory issues, does not take decisions by itself, but on the basis of feedback from technical committees from various lines of business.

The IUMI website publishes a so-called current issue list, updated every three months, that runs to 18 topics.

Although the International Maritime Organization is a major focus, the European Union is also of great importance, as where Brussels leads, the rest of the world often follows.

A lobbyist in the Belgian capital is a distinct possibility, when resources allow.

As part of a drive to ensure IUMI makes its voice heard, Mr Lange has pledged greater openness, including more contact with the media.

“We are currently discussing our communications strategy and how to improve it in future. As a trade association, you always want to find more visibility, of course,” he said.

Internal reforms include new articles of association, which have already been circulated in draft and which are likely to be approved by IUMI’s governing council without major changes.

“This means we want to be even more compliant, more transparent, more modern. We have new rules, for example, for our technical committees, limiting tenure of members to four years, although you can be re-elected.”

in www.lloydslist.com 20/09/2014

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