ESC ASKS EC TO PROBE SHIPPING INSURANCE PRACTICES

ESC ASKS EC TO PROBE SHIPPING INSURANCE PRACTICES    The European Shippers’ Council has asked the European Commission to extend its current investigation into airline insurance to include war risk insurance in the shipping sector.
   Following the terrorist attacks in the U.S. and moves towards military actions in the Mideast, several shipping lines have said that their insurance companies introduced war risk premiums that “far outweigh the risk to their vessels” and that “the area which needs war risk insurance is too large,” the shippers’ organization reported.
   The shipowners “also fear that insurance companies may be abusing their dominant position in the market to force through large increases,” the ESC said.
   The ESC said that the European Commission must use its powers to ensure that the insurance industry is not seeking to exploit the current situation.
   “The shipping lines’ concerns are very serious,” said Neil Johnson, spokesman for the ESC. He warned that many European shippers facing subtantial risk surcharges passed on by shipping lines will find it very difficult to compete in international markets.
   The ESC also sought reassurances from shipping lines that the risk surcharges passed on to shippers reflect the actual extra insurance costs that they bear.
      “Lines must not seek to profit from the current situation,” he said.