It’s not even just the price of a ship and cargo at risk. Lead times are around 2.8 to 3 yrs for crude tankers and around 3.5 yrs for LNG carriers. That’s a long time to not be able to conduct business even if insurance did pay out. It is 100% rational to sit out a few weeks to figure out how to resume operations safely rather than trying to sneak through and hope for the best.
Alternatively wasn’t he floating some kind of mandatory insurance scheme? mandatory in the sense that the insurer can’t refuse. Sounds like a great time to liquidate some ageing stock for yhuge profits.
No. Reinsurance “scheme” lets an insurer transfer all risk. If US government is willing to pay the insurer $100M, then they will charge the ship $1M or $99M for the voyage, but keep $100M total. Brian Kilmede will not volunteer to be crew on the ships no matter the pay, either.
Trump is about to find out that ship owners won’t risk hundreds of millions per ship on an uninsurable voyage just to stroke his ego.
It’s not even just the price of a ship and cargo at risk. Lead times are around 2.8 to 3 yrs for crude tankers and around 3.5 yrs for LNG carriers. That’s a long time to not be able to conduct business even if insurance did pay out. It is 100% rational to sit out a few weeks to figure out how to resume operations safely rather than trying to sneak through and hope for the best.
Yeah, especially since they have promised its only going to be 3 weeks. It’s almost as if that was a lie.
Every war ever fought was going to be over in a couple of weeks with an overwhelming victory.
Well, at least Trump is well known for paying his debts.
Oddly, due to maritime law, it’s the cargo owners who would have to pay if the ship was only damaged but not sunk.
Alternatively wasn’t he floating some kind of mandatory insurance scheme? mandatory in the sense that the insurer can’t refuse. Sounds like a great time to liquidate some ageing stock for yhuge profits.
No. Reinsurance “scheme” lets an insurer transfer all risk. If US government is willing to pay the insurer $100M, then they will charge the ship $1M or $99M for the voyage, but keep $100M total. Brian Kilmede will not volunteer to be crew on the ships no matter the pay, either.
Should’ve involuntarily added him to the crew of that genius “submarine”. Missed our chance.
Oh it is insurable all right. You just have to pay what is called the “war premium”. I bet they wouldn’t like what comes through the strait anyway.
Apparently the maritime insurance market writes about $1b per year, around .005% of hull value to 1-3% - which exceeds the profit margin.