Estimation of shipping insurance premiums for Arctic routes

Abstract

With global warming, melting Arctic sea ice and development of maritime technology are enabling the regular voyages in Arctic waters. Although, the Arctic maritime transport can save time and costs, the Arctic waters serve as a high-risk, environmentally fragile and sensitive ice area for ship navigation. The Arctic maritime transport faces the test of complex sea ice, geomagnetic disturbance, high winds and low visibility. In the face of the increase in shipping risks and their particularity, shipping insurance will play a critical role. Estimating of Arctic shipping insurance premiums has become the top point for insurance companies. For this, this paper uses the shipping cost accounting method to estimate the shipping costs of 5 ship types passing through the Arctic route and the traditional route to 10 different ports respectively. A reasonable interval for hull and cargo insurance premiums is estimated by the cost balance between the two routes. The reasonable number of the insurance premiums for the Arctic shipping calculated in this study can provide a reference for fulfilling of the Arctic shipping insurance.