Marine Insurance Aspects of the Trans Polar Passage

(by Karl Magnus Eger)

Currently there has been no commercial voyage using the central Arctic Ocean as a shortcut. However, if one considers the possibility of any future TPP, the insurance rate is likely to be high, if not higher than the risk factors already discussed for NWP and NSR/NEP. Higher risks for ice damage to ships and potential damage to cargoes in extreme cold temperatures, and nonexistent maritime infrastructure in the Central Arctic Ocean (such as salvage, ports and emergency response) will most likely be factors in determining future TPP insurance rates. If an accident should occur hundreds of nautical miles in ice and outside any reasonable distance for any salvage of SAR operation, it is likely that the premium cost would be so high that it would not be economically profitable for ship owners.

Karl Magnus Eger, 2010, Marine Insurance Aspects of the TPP, CHNL.©