Political tensions, particularly in the East and South China Seas, are a cause of concern for the marine industry, as vital shipping routes face higher risk of disruption, said a marine insurance expert.
According to Marcus Baker, marine practice leader of global brokerage Marsh, around 30% of the world’s marine trade passes through the South China Sea, which is the theatre for several sovereignty disputes among several countries. While many of these disputes have been present for several decades, tensions have risen in the past year, giving an atmosphere of increased political risk across the region.
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Marsh’s Political Risk Map 2017 identified several important disputes in the Asia-Pacific region with a potential to escalate. These are:
Additionally, several comments from the administration of US President Donald Trump have suggested that the US is open to conducting actions to prevent China from occupying more territory in the international waters of the South China Sea.
While tensions have yet to directly affect the shipping industry, there is an air of concern about potential escalation.
Baker advised shipowners navigating these waters: “We would recommend keeping your marine war risk insurances in place and consider additional or enhanced risks in these waters, in case any tensions escalate into conflict. In addition, you should keep a close eye on developments in the region to be aware of any escalating tensions or possible danger zones that could impact your operations.”
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