Industry News

With CMA CGM reportedly ready to sign a letter-of-intent for nine ultra-large container vessels (ULCVs) of 22,000 teu, insurers are becoming increasingly concerned that their exposure may be too concentrated.

At a conference in Seoul, South Korea, this week, shipbuilder Hyundai Heavy Industries (HHI) revealed it was in competition with a Chinese yard for the order from the French carrier.

So far CMA CGM has declined to comment, but has not denied the reports, something it has been quick to do in the past when linked spuriously to big ship orders.

Notwithstanding liner industry concerns that the sector is already overtonnaged, the prospect of yet more behemoths being put into service has reignited the concerns of insurers.

In a LinkedIn post today, Michael Hauer, head of marine reinsurance for the Singapore branch of Munich RE, says the insurance industry needs to try to understand the likely exposure when – not if – a ULCV gets into trouble.

Indeed, when the 2008-built 8,110 teu MOL Comfort broke its back off the coast of Yemen in 2008, resulting in a total loss of the ship and 4,380 containers, the insured cargo loss was reported at some $300m.

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