London marine insurers to meet after Gulf ship attacks

A damaged Andrea Victory ship is seen off the Port of Fujairah, UAE, on May 13, 2019. (File/Reuters)
Updated 15 May 2019
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London marine insurers to meet after Gulf ship attacks

  • London’s marine insurance market will assess whether it needs to change the risk level for vessels in the Gulf
  • This comes after an attack on ships off the UAE earlier this week

LONDON: London’s marine insurance market will meet on Thursday to assess whether it needs to change the risk level for vessels in the Gulf after an attack on ships off the UAE earlier this week, a senior official said on Wednesday.
Such a move could lead to an increase in insurance premiums.
On Tuesday, armed drones attacked two of Saudi Aramco’s oil pumping stations and forced the state producer to briefly shut its East-West pipeline. The incident came two days after an attack on four oil tankers — two of them owned by Saudi Arabia — off Fujairah in the UAE.
“The Joint War Committee will meet tomorrow to assess the situation in the Gulf,” said Neil Roberts, head of marine underwriting at Lloyd’s Market Association (LMA), which represents the interests of all underwriting businesses in London’s Lloyd’s market.
“This is prudent as capital providers would expect underwriters to review their exposure in the light of recent developments,” he told Reuters.
The UAE has not characterized the sabotage or blamed anyone for Sunday’s attack, but US national security agencies believe proxies sympathetic to or working for Iran may have been behind it, a US official has said. Tehran has distanced itself from the incident, which no one has claimed.
Yemen’s Houthi-run Masirah TV earlier said the group had carried out the drone attacks on “vital” Saudi installations.
“At the moment there are not many facts or verifiable information (about the attacks on Sunday),” Roberts said.
“There is no decision yet on whether to change the listed areas of enhanced risk. There are a number of options, which include no change.”
He said any changes would take seven days to come into effect.
“Ships going into the Gulf already have to inform underwriters; the question is whether vessels within the Arabian Gulf and operating there are additionally exposed.”
The Joint War Committee, which comprises syndicate members from the LMA and representatives from the London insurance company market, normally meets every quarter to review areas it considers high risk for merchant vessels and prone to war, strikes, terrorism and related perils.
It has not updated the list of high risk areas since June 2018. Its guidance is watched closely and influences underwriters’ considerations over insurance premiums.
Some oil and shipping companies said they would have to alter their routes or take precautions near Fujairah since Sunday’s attacks.
Japanese shipping group Nippon Yusen has already decided to refrain from sending tankers to Fujairah for bunkering, maintenance or crew swaps except for emergencies, a company spokesman said.
Others such as Denmark’s Maersk Tankers told Reuters they were monitoring developments closely, with no impact on their operations in the area.


British Steel collapses, threatening thousands of jobs

Updated 22 May 2019
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British Steel collapses, threatening thousands of jobs

LONDON: British Steel Ltd. has been ordered into liquidation as it struggles with industry-wide troubles and Brexit, threatening 5,000 workers and another 20,000 jobs in the supply chain.
The company had asked for a package of support to tackle issues related to Britain’s pending departure from the European Union. Talks with the government failed to secure a bailout, and the Insolvency Service announced the liquidation on Wednesday.
“The immediate priority following my appointment as liquidator of British Steel is to continue safe operation of the site,” said David Chapman, the official receiver, referring to the Scunthorpe plant in northeast England.
The company will continue to trade and supply its customers while Chapman considers options for the business. A team from financial firm EY will work with the receiver and all parties to “secure a solution.”
“To this end they have commenced a sale process to identify a purchaser for the businesses,” EY said in a statement.
The government said it had done all it could for the company, including providing a 120 million pound ($152 million) bridging facility to help meet emission trading compliance costs. Going further would not be lawful as it could be considered illegal state aid, Business Secretary Greg Clark said.
“I have been advised that it would be unlawful to provide a guarantee or loan on the terms of any proposals that the company or any other party has made,” he said.
Unions had called for the government to nationalize the business, but the government demurred.
The opposition Labour Party’s deputy leader, Tom Watson described the news as “devastating.”
“It is testament to the government’s industrial policy vacuum, and the farce of its failed Brexit,” he said in a tweet.
The crisis underscores the anxieties of British manufacturers, who have been demanding clarity around plans for Britain’s departure from the EU. Longstanding issues such as uncompetitive electricity prices also continue to deter investment in UK manufacturing, said Gareth Stace, the director-general of UK Steel, the trade association of the industry.
“Many of our challenges are far from unique to steel — the whole manufacturing sector is crying out for certainty over Brexit,” Stace said. “Unable to decipher the trading relationship the UK will have with its biggest market in just five months’ time, planning and decision making has become nightmarish in its complexity.”
Greybull Capital, which bought British Steel in 2016 for a nominal sum, said turning around the company was always going to be a challenge. It praised the trade union and management team, but said Brexit-related issues proved to be insurmountable.
“We are grateful to all those who supported British Steel on the attempted journey to resurrect this vital part of British industry,” it said in a statement.