Given the current global economic uncertainty, the variability in ship values and the high volumes of new deliveries, the value of intelligent real-time information and executing systematic and thorough underwriting processes and procedures cannot be overstated.
Banks, insurers and P&I clubs utilise RightShip Qi to supplement their internal risk processes. Many insurance brokers also use RightShip data to deliver premium relief across multiple lines of cover to their customers in recognition of the superior nature of the vessels they engage.
Given the current over supply of vessels in the market, it makes economic sense for banks to reduce their risk by financing energy efficient assets, particularly given the typical 25-year investment horizon. Financial institutions increasingly factor in sustainability into their financing criteria as the trend towards responsible investment grows. An energy efficient vessel has lower fuel costs and better chartering potential, which may lead to a higher initial asset value and a longer period of economic depreciation. With more indexed orientated freight rates, inefficient vessels will have smaller margins and a reduced budget for maintenance, crew, conditions, systems and loss control measures.
RightShip’s EVDI™ and GHG Emissions Rating provide a standardised framework for measuring the efficiency of an investment portfolio and tracking changes over time. Financial institutions can also use the environmental rating to map the correlation between investment risk and vessel employment as an increasing number of charterers seek out more efficient vessels. As more nations place a price on carbon, the payoff for investing in energy efficient vessels will materialise and financial institutions that move first will have significant market advantage.
Case Study: The North of England P&I Association
“RightShip provides us with a very useful and comprehensive online source of information. The assistance we receive from RightShip staff is excellent. The new report function helped us to significantly improve the way we obtain information for all our annual review process, which has been a great help.”
The ‘A’ rated North of England P&I Association (North) is a leading marine mutual liability insurer based in Newcastle upon Tyne, UK with regional offices in Greece, Hong Kong, Japan and Singapore. As a leading member of the International Group of P&I Clubs, North insures approximately 12.5% of the Group’s owned tonnage.
Since joining RightShip in 2009, North has used a wide range of vetting data from RightShip’s fleet list and reporting metrics in its risk assessments.
Case Study: ABN AMRO
"RightShip's Ship Vetting Information System complements our internal risk management procedures during the vessel loan underwriting process. SVIS provides an instantaneous risk rating of the vessel under consideration and we can also review the star rating of the owners' fleet and ship manager associated with the vessel. Sustainability is one of ABN Amro's business principles and we can now factor a vessels' energy efficiency into our underwriting process."
Global bank ABN Amro began subscribing to RightShip in 2009 to complement their internal risk processes.