World Bunkering > News > Summer 2009 > Meeting the Bunkers Convention

The need to provide cover for the Russian merchant fleet to meet the requirements of the International Convention on Civil Liability for Bunker Oil Pollution 2001 (the “Bunkers Convention”) has been one the priorities of the marine arm of the country’s largest insurer.

Founded in 1947, Open Joint Stock Insurance Company (IJSC) Ingosstrakh has grown from a modestly sized administrative division of the USSR Ministry of Finance into a large insurer operating both domestically and internationally. The company looks to the international market for reinsurance working with, among others, AIG, Allianz, AXA, CCR, Gen Re, Hannover Re, Lloyd’s, Munich Re, and Swiss Re.

The Convention requires ships over 1,000 gt to maintain insurance or other financial security, such as the guarantee of a bank or similar financial institution, to cover the liability of the registered owner for pollution damage in an amount equal to the limits of liability under the applicable national or international regime, but in all cases, not exceeding an amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims, 1976 as amended.

Its marine account represents just 5-6% of Ingosstrakh’s portfolio but the company has been in the shipping insurance business for over 50 years. Originally its portfolio was predominately Russian; in the last 15 years or so that has changed to a balance of internationally owned tonnage and domestic tonnage. Last year, marine hull and P&I business generated some $57 million of a total revenue of $816 million.

A spokesperson said: “The rapid developments, mainly political, that have occurred during the last decade have taken us out of the domestic sphere and into the international one, maintaining our competitiveness. We are proud to have adjusted to international customs and standards and to continually develop with the changing times.”

The Russian insurer has been issuing Bunkers Convention Blue Cards to enable signatory states to issue certificates since August 2008. It is not the only Russian provider of Bunkers Convention insurance, but it is one of the main ones. It now covers more than 800 vessels in compliance with the Convention, including around 30% of the Russian seagoing merchant fleet for bunker liability though some 70% of its insured vessels are foreign flag “So,” asked World Bunkering, “have there been any claims yet?” The answer was: “Not yet.” But the company is confident it will be able to handle any claims efficently – and there inevitably will be some before too long.