Insurance costs keep rising

Conor Bays, of Charles Taylor, looks at some of the reasons why the costs of salvage continue to increase

2013 saw the International Group of P&I Clubs (IG) publicise the findings of a review which was initiated by the IG Large Casualty Working Group. The review itself contemplated several areas which can be attributed to the rising costs of salvage; location, water depth, wreck situation, response equipment and weather among others. These will all have their part to play when the final costs of dealing with the incident is toted up. Although these mainly seem to concern environmental factors, there are other factors which can be attributable to the final payout figure. The purpose of this discussion is to consider the matrix of factors causing the increasing costs being incurred by insurers and whether a memorandum of understanding (MoU) presented by the IG may well be the catalyst for changing maritime casualty response for the better.