Insurance for voyages through the Northern Sea Route (NSR) may only be available on a case-by-case basis, according to a position paper by the International Union of Marine Insurance.
The IUMI has found that commercial shipping in the region is likely to “gradually” increase in the near future due to changing ice conditions and the use of liquefied natural gas (LNG).
It also stated that the lack of historical loss data would cause insurers to be “cautious”, with designated areas being exempt from ordinary insurance cover or conditional as set out in the insurance conditions.
Vessels using the NSR must consider a number of points in order to obtain insurance, including ice condition-specific navigational equipment, ice damage residual stability and the distance to the nearest ‘place of refuge’.
Find out more about the Northern Sea Route and Arctic shipping by reading a Port Technology technical paper
The report added that an important factor would be whether the ship has a Polar Ship Certificate, given by the International Maritime Organisation (IMO) based on its suitability to travel in the Arctic.
It stated: “With heightened probability and the potentially severe consequences of even small incidents occurring in the harsh Polar environment, insurance will only be available on a case-by-case basis – if at all in certain defined areas of the region.
“In the coming years, more traffic related to energy, fisheries and destination cruises is to be expected.
“Over time, this will gradually provide marine insurers with more statistical data to assist in the risk assessment.”
the ship Venta #Maersk is attempting the #Arctic Northern Sea Route. A quick look a the sea ice it may encounter. https://t.co/Z8anBDaUW0 pic.twitter.com/kne3KwU1Lk
— Mark Brandon (@icey_mark) August 24, 2018
The NSR, which stretches from the Bering Strait, between Russia and the US, to the North Sea, has the potential to reduce average transit times from 37 days to 19.
An LNG tanker, the Christophe de Margerie, broke the record for crossing the NSR on July 31 2018, doing so in 18 days.
On August 21 2018, Maersk announced that it would launch its first container ship along the NSR, though insisted that it does not see the Artic as an alternative to its usual routes.
Maersk has announced it will launch its first container ship through the NSR
An LNG carrier has crossed the NSR in just 17 days, breaking the previous record