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Geopolitics ‘back with vengeance’ as marine peril: ex-MI6 boss Dearlove

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Increasing geopolitical risks around key maritime choke points and the emergence of cyber threats towards ships are heightening the risks faced by shipowners and their insurers, according to former head of MI6 Sir Richard Dearlove.

Sir Richard, who is also non-executive chairman of Ascot Underwriting, said geopolitics was “back with a vengeance”, highlighting the ongoing tensions around the Strait of Hormuz and disputes between Iran and Saudi Arabia.

“The Iranians are very good at intervening with the safety of shipping and, of course, denying that it is them,” the former intelligence chief said.

“I don’t think any of us are in any doubt that is strategic thinking by Iran to make its presence in the region felt and to emphasise the vulnerability of the Strait of Hormuz.”

Sir Richard made the comments on a webinar about geopolitical marine risk organised by the broker Willis Towers Watson.

Tensions have always been high around the key area of water in the Middle East, and concern has been heightened since mid-2019, when the marine war market faced losses of around $50mn-$100mn following a series of attacks in the Persian Gulf, which were blamed on Iran.

Ongoing minor incidents, again blamed on Iran, have continued ever since, allowing underwriters to keep breach premiums high.

In an interview with this publication, CEO of global marine at Willis Ben Abraham said the ongoing uncertainty in the region was prompting underwriters to charge more in breach premiums, which are levied when ships enter areas perceived to be of a heightened risk.

“Like anything, the more uncertainty there is, the more margin of error they build into their portfolios,” Abraham said.

As well as physical attacks on ships, the market is also increasingly aware of the peril of cyber attacks on vessels, from either governmental or non-governmental actors. The trend towards increasingly autonomous shipping only serves to heighten the risk.

“As shipping becomes more and more cyber dependent, which it is going to do, the security of cyber systems becomes of greater importance,” Sir Richard said.

“We have to bear in mind how we strengthen our protection, not just the physical protection of ships from piracy but the technological protection of ships from cyber interventions by malign players.”

Abraham said the amount of autonomous shipping technology had “changed dramatically” in the past 10-15 years.

“Real-time monitoring of ships from shore increases exposures, interconnectivity of systems on board increases exposure, electronic navigation systems increase exposure,” he noted.

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