IBIA CONVENTION: Insurers Are Wary of Bunker Industry's Lack of Transparency

by Ship & Bunker News Team
Friday November 17, 2023

A perceived lack of transparency is a major concern for insurers when looking to work with the bunker industry, according to insurance company Markel.

Crystal Dsouza, senior underwriter and head of trade credit for MENA at Markel, addressed the topic at a panel session moderated by Ship & Bunker's Jack Jordan at the IBIA Annual Convention 2023 in Dubai last week.

"[One concern] is the limited access to data availability and the lack of transparency," Dsouza said.

"Certainly for the smaller companies where, of course, the bunker industry is relatively opaque in terms of structure.

"The limited data on the quality, quantity and pricing basically makes it very difficult for us as underwriters to assess the rise effectively, because it's not very straightforward."

Another major problem is the history of fraud in the industry.

"We as underwriters can look at the data, we can look at the trend of the industry, we can look at how certain buyers are performing based on trading experience and some financials, but what we really cannot underwrite is the intentions of a company, or the intentions of certain individuals in that company," Dsouza added.

Both of these issues can be addressed with better compliance procedures, she said.

"One of the messages that we constantly reinforce is having real robust credit management processes, due diligence processes, qualitative and quantitative control mechanism systems, and very clear contracts.

"A close collaboration in the industry can bring back and reinforce that trust, that confidence, that banks and insurers need."