Iran war shows China’s urgent need to plug maritime insurance gap: expert

The havoc unleashed on global shipping by the US-Israel war on Iran has underlined China’s urgent need to fix its lack of a robust maritime insurance industry, a shipping expert has said.“In the maritime shipping sector, China’s industrial chain for ‘hardware’ is very well-established and mature,” said Chen Jihong, director of the Shenzhen International Maritime Research Institute.“However, when it comes to ‘software’, we are still constrained by others, and it will be difficult to change any time soon,” added Chen, who is also a distinguished professor at Shenzhen University, on the sidelines of the Boao Forum for Asia on Thursday.By “software”, Chen was referring to the legal and financial services crucial to the shipping sector, including insurance and reinsurance for cargo and ships – industries long dominated by Europe and the United States.Developing a Chinese shipping insurance industry has been on Beijing’s agenda for decades, with the authorities recently eyeing the Guangdong-Hong Kong-Macau Greater Bay Area as an incubator. Efforts accelerated after Western governments banned insurers from underwriting Russian oil shipments amid the war in Ukraine.“From the Russia-Ukraine-war" class="entity-link entity-event" data-entity-id="1200" data-entity-type="event">Russia-Ukraine war to the current issues in the Middle East, we must ask ourselves: as a major maritime nation, can our long-haul vessels be supported by an independent insurance capability and financial system?” Chen said.