IUMI 2024 Conference Updates: Cargo Committee

As a brief introduction for those who don’t know me, I am Mark Watts & I am the Lead underwriter for Allied World’s Asia pacific Marine business & I also represent Singapore on the IUMI Cargo technical committee.

In 2024, the annual conference returned home to Berlin where IUMI was founded 150 years ago. The conference had a record 817 attendees who gathered to celebrate the growth & development of what started off as a German organisation in 1874 to what is now a global organisation today. Delegates were treated to a wide range of workshops covering the pressing marine insurance issues of the day including a special session charting the history of IUMI over the past 15 decades and the future of marine underwriting.

As a member of a committee, we are expected to attend various calls/meetings & join various working groups throughout the year, attend the conference & provide a Country report for where we represent.

During the Cargo technical committee meeting in Berlin, we discussed a number of important Cargo matters.

CIF Incoterms 2020 & How far does the Insurance obligation extend for a CIF sale?

The Cargo Committee had an in-depth discussion on the issue. The topic concerned the extent of the seller's insurance obligation under a CIF sale according to "Incoterms 2020 CIF port of arrival x." Specifically, whether the seller's insurance should cover unloading at the port of arrival.

The discussion examined the ICC clauses on duration, relevant Incoterms literature, input from surveyors, and perspectives raised within the Cargo Committee. It was noted that if a CIF sale only requires Cargo clause C terms, and C terms do not cover unloading risks, it may not be reasonable to extend the seller’s insurance obligation to unloading.

There were differing opinions within the committee on how to interpret the scope of the CIF terms, and no consensus was reached.?

Updated and Revised Information on the?Cargo Watch List

We were informed that the Joint Cargo Committee (JCC), with support from the LMA, is currently reviewing and updating the Cargo Watch List. Alongside these updates, the contract with S&P Global is being renegotiated to modernize the tool, to complete the enhancements by the upcoming Hamburg conference. New features will be introduced, including a split between risks for sea, land, and air, recognizing that risk profiles for these modes of transport can vary significantly. These improvements are expected to enhance the tool, which is widely used in the market for risk assessment and contract negotiations

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IUMI Strategy 2030

We were presented with an overview of the IUMI 2030 strategy, which was initially launched during the pandemic under the previous President and has since been advanced by the Executive Committee. Following previous EC considerations and valuable insights from the November/December member survey, the EC made a preliminary decision at its winter meeting in February 2023 in London, identifying 11 potential projects for the IUMI 2030 strategy.

This strategic initiative focuses on evaluating and adapting IUMI to ensure it is well-positioned for the coming decade, with a strong emphasis on incorporating extensive member input to maintain alignment with the agreed direction.

This strategic initiative focuses on evaluating and adapting IUMI to ensure it is well-positioned for the coming decade, with a strong emphasis on incorporating extensive member input to maintain alignment with the agreed direction.

The Executive Committee has organized the work into six key streams:

1. Tasks and Purpose
2. Finances
3. Organization
4. People and Diversity
5. Membership
6. Events, with each stream led by one or two EC members.

Member consultations have shown that IUMI’s current priorities resonate well with the broader membership. However, the IUMI 2030 strategy aims to build on past experiences, drive modernization, and facilitate the Secretariat’s growth to enhance services and ensure readiness for future challenges.

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Global lack of Marine insurance talent

Some of the facts on Global Marine talent are pretty scary.? It's said that in the next 5 years, up to 35% of current Marine underwriters Globally will retire & 50% in the next 12 years.

It's said that in the next 5 years, up to 35% of current Marine underwriters Globally will retire & 50% in the next 12 years.

With expertise primarily concentrated in an aging demographic, the industry faces the daunting task of transferring critical knowledge to the ‘next generation’ & failing to replace this knowledge can quickly jeopardize our business.

The IUMI education forum has implemented many initiatives, including the Masterclass in Cargo and the upcoming Masterclass in Hull, which aim to enhance global access to marine insurance education. It was also mentioned the development of webinars and emphasized the global reach of these efforts.

IUMI’s education officer is playing a key role in strengthening the education program. A cornerstone of these initiatives is the contribution of IUMI committee members, whose work supports the organization's ongoing knowledge-building efforts.

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Finally, the consequences of an IUMI-approved wording of General Average security letter

It was highlighted that a significant issue regarding General Average (GA), pointing out two main concerns:

1.????? The York-Antwerp Rules (YAR) 2016 are rarely applied.

The YAR 2016 was established through a common agreement among all stakeholders, primarily involving ship-owning and property interests. These rules are, in many respects, more suited to modern times and beneficial for cargo interests, providing, for instance, more balanced provisions for all parties. Most transport documents reference the YAR or any subsequent modifications. However, GA Adjusters considered the YAR 2016 as "new rules," rather than a modification. In a clear judgment, the High Court of Justice in the UK ruled that "any subsequent modification thereof" can reasonably be interpreted to include the new version of the Rules (namely, 2016). This ruling is significant, as cargo interests should insist on applying YAR 2016, despite the GA Adjusters' preference to rely on YAR 1994.

2.????? The wording of the CMI GA guarantees, which are endorsed by IUMI, presents challenges.

The CMI GA guarantee wording introduces new terms and obligations, which lack a legal basis since they are not part of the underlying contract of carriage or affreightment. Therefore there is a requirement for cargo owners to notify remedies within three months before their payment obligation arises is legally flawed (Clause 4, last sentence of the form). While the obligation for prompt payment (Clause 5 a) may be reasonable, the GA Adjuster lacks the authority to enforce it as a binding requirement.

Additionally, it is noted that under English law, the limitation period for claims is generally six years after the event. However, Clause 5 d of the guarantee could allow shipowners to extend this indefinitely by controlling the issuance of the adjustment, as the prescription period begins on the date the GA Adjustment is issued. The accruing interest and costs, favoring ship interests, create an unpredictable and unfair liability period for cargo interests.

This issue is particularly concerning as it undermines the predictability and fairness that time-bars are intended to provide. It was also pointed out that IUMI's approval of these guarantees supports a system that disproportionately benefits shipowners, further disadvantaging cargo owners. This matter requires urgent attention and revision to ensure that guarantees do not retroactively impose new obligations or unfairly shift the balance toward one party.