Region shipowners seek lower premiums

Region shipowners seek lower premiums

Agence France-Presse, Kuala Lumpur

Southeast Asian ship owners have called for lower war risk premiums on vessels entering the Gulf region after the Sept.11 terror attacks in the U.S., a report said Sunday.

Premiums have been increased by between six- and ten-fold and this was "unreasonable," Federation of ASEAN Ship Owners' Association chairman Mohamad Ali Yasin was quoted as saying by The Sunday Star.

Before the U.S. tragedy, he said hull cover rates were 0.005 percent of a ship's total value but this has shot up to about 0.05 percent.

Some marine underwriters have agreed to a rate of 0.035 percent but Mohamad Ali said this was still high as insurance claims by shipping firms and the industry's loss ratio have been minimal compared to other sectors.

"Our members have expressed dissatisfaction and unhappiness over the increase which we feel is unreasonable in light of the weak market situation, overcapacity of space and current economic slowdown," he said.

"We feel that the underwriters are taking advantage after the Sept.11 attacks. The increase hull war risks are becoming a heavy burden to shipping companies."

The federation comprises members of ship owners associations in the Philippines, Indonesia, Myanmar, Malaysia, Singapore, Thailand and Vietnam.

The seven countries are members of the Association of Southeast Asian Nations (ASEAN), along with Brunei, Laos and Cambodia.