Pratik Bijlani –
In a bid to bolster its maritime insurance capabilities and reduce reliance on foreign P&I clubs, India is setting sail on a new venture. On April 16th, Directorate General of Shipping in association with The Shipping Corporation of India Limited (SCI) hosted a Joint Interactive Session at SCI Auditorium in Mumbai, to unveil its proposal for establishing a domestic Protection and Indemnity (P&I) club for coastal ships and vessels operating on inland waterways.
The session aimed to address concerns and elaborate on the details this ambitious plan, which seeks to provide Indian shipowners with the option to purchase open-ended high-risk covers, traditionally hesitated upon by conventional players. P&I insurance, a critical component in the maritime industry, shields shipowners from potentially exorbitant costs arising from accidental harm to people, property, and the environment.
Currently, Indian ships predominantly rely on foreign P&I clubs for specialized insurance, leading to foreign currency outflows and a dearth of local expertise. With no P&I club of its own, India is taking proactive steps to establish its presence in the maritime insurance sector. The proposed Indian P&I club would offer local coverage, saving on foreign currency expenditure, enhancing India’s maritime legal and arbitration expertise, and expediting claim settlements through its local presence.
The session commenced with a presentation by Capt Manish Kumar, Nautical Surveyor-Cum-Deputy Director of Shipping (Tech/Crew), who elucidated the basics of P&I insurance and outlined the benefits of an Indian P&I club. While emphasizing the need for local coverage, Capt Kumar highlighted the challenges posed by the relatively small size of the Indian fleet and the formidable competition from international players.
Subsequently, Mr Hariharan Subbiah, representing SCI, delved into the company’s history, corporate structure, and the imperative of P&I insurance in today’s maritime landscape. Citing recent catastrophic incidents like the MV Dali collision and the Costa Concordia sinking, he underscored the critical role of P&I insurance in mitigating unforeseen liabilities.
Setting the tone for the panel discussion titled Establishment of indigenous P&I cover/products in India were presentations from Mr Anil Devli CEO, Indian National Shipowners Association (INSA) and Capt Rakesh Singh, Honorary Secretary, Indian Coastal Conference Shipping Association (ICCSA) who offered valuable perspectives on the significance of P&I insurance from a shipowner’s standpoint and the regulatory framework governing liability underwriting in India.
The spotlight then shifted to Ms Shashikala Sreedharan of New India Assurance Co Ltd, who provided insights into the current P&I products offered by the company and its collaboration with SCI to offer comprehensive coverage to shipping companies.
Mr Sanjay Mokashi from GIC Re elucidated the intricacies of reinsurance and its pivotal role in bolstering the liability cover provided by insurers. He emphasized GIC Re’s expertise in supporting P&I clubs and reiterated its commitment to the maritime insurance sector.
The event was graced by eminent personalities including Capt BK Tyagi, CMD, SCI and Mr Shyam Jaggannathan, IAS, Director General of Shipping marked a significant milestone in India’s journey towards maritime insurance independence. As the nation embarks on this transformative voyage, stakeholders remain optimistic about the prospects of a thriving domestic P&I club, poised to propel India’s maritime industry to new horizons of success and self-reliance.
Marex Media