Impact of Marine insurance at times of pandemic

Covid-19 has brought the world standstill and economy and trade has also been effected hugely by pandemic. It is observed that the world economy will lead all it's ways to recession post covid-19. Economy is largely depended upon transportation of goods from one place to another since economy is predicted to go through rough patches in upcoming months it is predicted that marine insurance will be facing consequences in upcoming months. According to certain reports it is predicted that there will be an investment loss of 96 billion dollars in upcoming months. Let's look into the current scenario that is said to be faced in trade.

• Delay in Movement- Many ships are stranded at ports causing lot of delay in the movement of goods and cargo to it's destination. Resulting into delay or goods not reaching to customer at the expected time. Certain insurance policies such as stock throughput clause excludes the loss that occurs due to delay of transit.
• Additional cost and re-routing- Due to certain restrictions imposed by few governments many ships are changing the trade routes between the source and destination. This is leading into additional costs incurred of re routing causing a huge loss.
• Vulnerable Goods- Many perishable goods such as eatables and pharma products are temperature sensitive. Due to change in temperatures it can cause damage to these products. resulting loss these companies.

With these above scenario's let's look into the future of marine insurance in the upcoming months of post covid-19 pandemic-

• Changes in the duration clauses- As discussed above certain insurance policies don't provide coverage if the goods do not reach at defined duration. But after the pandemic ends the customer will be demanding claim with subject to number of days transit is held in other port due to lockdown along with duration clause. Customer will be expecting relaxation in the duration clause.
• Many American and European multi nationals have changed their opinion about China considering a root cause for causing the covid-19 pandemic which is resulting into many corporates moving out of China causing many sanctions on import and exports from China . This may see changes in the world economy and on insurance point of view we can see insurance companies will underwrite a huge sum of premium for the trade going through China.
• Many new norms regarding the safety measures will be taken into the consideration while transportation of goods. If any intermediate violates or shows a negligent attitude towards handling goods causing corona virus can be taken into consideration.
• Waving part for digital transaction- With small shops encouraging digital transactions for business instead of currency. We can may see in the future that the bill of lading and trading document will be in digital format.

According to famous quote which says that change is rule of nature. So, it is expected that a certain situation can bring lot of change. And people have to accept the changes with open hands.