Extreme weather is affecting shipping routes, extending voyage times and increasing risks for insurers, Axa XL marine hull and liabilities underwriter Ben Healey has told this year’s Claims Convention. 

Mr Healey says ocean temperature shifts are having an impact on tropical storms, cyclone patterns have changed, while an extended period of low rainfall in Central America has affected water levels in the Panama Canal. 

Shipping wait-times had increased to about 20 days on average and more up-to-date reports suggest they have further risen to 28-32 days, he told the Claims Convention in Sydney last week. 

Vessel operators are having to adjust to the longer timeframes and are changing routes due to the various weather impacts. 

“All of this starts to have an increased effect on insurers,” he said. “There’s additional stress on things like machinery, and just general wear and tear on the vessel, and everything that goes with that as well.”

Mr Healey says global data has shown crew deaths have risen sharply as people spend longer periods at sea amid poor conditions. 

“Crew safety support, crew in general, is probably the number one factor that impacts maritime or marine insurance and maritime operations,” he said. 

The Claims Convention, now in its 17th year, is presented by the Australasian Institute of Chartered Loss Adjusters and the Australian and New Zealand Institute of Insurance and Finance. 

A panel discussion focused on the insurance industry’s flood response and lessons learned highlighted that expert report improvements and better disaster response communication and co-ordination are among changes needed. 

Insurance Council of Australia COO Kylie Macfarlane said the Deloitte report commissioned by the industry had provided a road map that could be applied to extreme weather events. 

“How we turn up differently in the future is to ensure that we are collaborating, that communication is open, not just within the industry, but with the stakeholders outside of the industry as well,” she said. 

Sedgwick Australia CEO Diego Ascani said improved co-ordination and collaboration after catastrophes could smooth processes. 

“That goes to debris removal, dealing with environmental spillage, temporary accommodation, use of hydrology. I think we can co-ordinate ourselves a little bit better as an industry,” he said. 

More standardisation on expert reports would be beneficial and could speed training times, particularly when international adjusters are brought in, while technology advancements will help triage claims, he said. 

ICA has released a best practice standard for expert reports, the independent panel reviewing the industry code of practice has made recommendations and a parliamentary inquiry into the 2022 floods, due to release its findings next month, has heard evidence on shortcomings around the use of specialists and claims handling. 

Australian Financial Complaints Authority lead ombudsman for insurance Emma Curtis said the organisation is looking to prepare an approach document early next year on claims handling that would include expert reports and cash settlements.