Surety Marine Eyes Insurance Options Along Middle Corridor - Managing Director (Exclusive Interview)

(MENAFN- Trend News Agency) BAKU, Azerbaijan, September 24. Surety Marine, an international insurance company specializing in marine and financial risks, is evaluating insurance opportunities along the Middle Corridor, Managing Director of Surety Marine, Kirill Patyrykin, told Trend in an exclusive interview.

"Azerbaijan offers interesting opportunities through its position on the Caspian Sea and its role in the Middle Corridor, which connects Asian and European markets through a combination of maritime and overland transport.

As businesses consider alternative routes, we see potential for cooperation with local insurers, brokers, shipowners and logistics operators on insurance arrangements tailored to these journeys.

Multimodal transport requires careful attention to cargo handling, temporary storage, transfers between carriers and the continuity of cover across different stages of transit.

The opportunity is to develop insurance that reflects how these routes actually operate. Their growth will depend on infrastructure, service reliability and commercial viability, alongside the demand for greater diversification in international trade," he said.

Impact of changing situation in Strait of Hormuz on international marine insurance market

The managing director assessed the impact of the changing situation in the Strait of Hormuz on the international marine insurance market.

"The impact has been profound. I remember war and strike rates of around 0.1–0.2% when I first entered the industry. Today, rates for high-risk exposures can exceed 20% per annum. That gives a sense of how dramatically the perception of risk has changed.

The escalation around the Strait of Hormuz has affected both premiums and the terms on which insurers are willing to accept individual voyages. Uncertainty about the scale and duration of the conflict can fundamentally change the economics of a voyage.

In my view, this reflects a deeper shift in how the market perceives geopolitical risk. A disruption in one strategic waterway can affect vessels, cargoes, energy supplies and financing simultaneously. Its consequences extend well beyond the insurance sector," he explained.

Key factors influencing determination of insurance premiums for vessel operating on specific route

Patyrykin also discussed the key factors that influence the determination of insurance premiums for a vessel operating on a specific route. According to him, the starting point is the vessel's actual exposure: where it will sail, how long it will remain in a sensitive area, which ports it will call at, and what cargo it will carry.

“The Joint War Committee's Listed Areas are an important reference for assessing war risks. However, the committee does not set premiums; rates are negotiated individually between underwriters and brokers.

Underwriters also consider the vessel's flag, ownership, age, condition, claims history and management standards, alongside crew experience and security preparedness. AIS voyage history, sanctions screening and verified security intelligence help establish the wider picture.

Threats such as drone attacks and interference with navigation systems require particular attention. Ultimately, the premium reflects the combination of these factors, the cover requested and the insurer's assessment of the voyage,” he stressed.

The company official said that Surety Marine differs from traditional insurance companies in its approach to risk assessment and underwriting.

“Our approach centres on specialist underwriting and a detailed understanding of each client's operations.

Marine insurance encompasses several business models. Mutual P&I clubs, for example, provide liability protection through collective risk-sharing, supported by the International Group's pooling and reinsurance arrangements. That structure plays an important role in the industry.

At Surety Marine, our focus is on complex and specialist risks that require an individual assessment. We combine technical underwriting with analysis of the vessel's operations, trading patterns and changing risk environment.

Clients are becoming more experienced and demanding in their assessment of insurance. They expect clear reasoning behind underwriting decisions, a practical understanding of their business and certainty about the scope of cover. Our approach is designed to respond to those expectations.

Marine insurance has always extended beyond physical hull damage, particularly through liability and cargo cover. What has become more prominent is the interaction between physical, operational and geopolitical risks.

A vessel may remain undamaged while its voyage becomes substantially more difficult or expensive. Rerouting, prolonged detention, port restrictions and interference with navigation systems can all change the operating environment.

Longer voyages can also affect fuel consumption, maintenance schedules and crew workload. For an underwriter, these changes matter because they alter the circumstances in which the vessel operates.

The assessment therefore needs to consider the vessel within its wider trading environment. It must also distinguish clearly between the risks a business faces and the losses its insurance policy actually covers," he noted.

Gaps in global trade insurance model exposed by risks in Strait of Hormuz, Red Sea, and other strategic shipping routes

The Director General also discussed the gaps in the global trade insurance model revealed by risks emerging in recent years in the Strait of Hormuz, the Red Sea, and other strategic shipping routes.

"In my view, the most significant gap concerns the financial consequences of disruption without insured physical damage.

A shipowner or cargo owner may face substantial additional costs because a route becomes unsafe or a voyage is delayed. Whether those costs are recoverable depends on the cover purchased and the specific policy wording. Businesses can therefore discover a considerable difference between their commercial exposure and their insurance protection.

Another challenge is the concentration of risk. A single regional crisis can affect many vessels and cargoes at once, placing pressure on underwriting capacity and reinsurance.

These events underline the need for clearer coverage expectations, better assessment of interconnected exposures and earlier discussions between clients, brokers and insurers when trading conditions change," he pointed out.

Discussing how cargo insurance risk assessment differs from hull insurance, Patyrykin said that cargo insurance focuses primarily on the cargo itself and its susceptibility to loss or damage during transit.

"Cargo underwriting begins with the goods and their susceptibility to loss or damage during transit. We look at their nature and value, packaging, stowage, handling requirements, temperature sensitivity and the proposed journey, including storage and transshipment.

Transit duration matters, particularly for perishable or sensitive goods. However, standard cargo insurance should not be understood as protection against every financial consequence of late delivery. The Institute Cargo Clauses generally exclude loss, damage or expense caused by delay, subject to their wording.

Hull and machinery underwriting focuses on the vessel itself: its construction, age, class, machinery condition, maintenance, management and operating history. The assessment considers the potential for damage, the cost of repairs and recovery, and the possibility of a total loss,” he said.

Expectations regarding key changes in international marine insurance market over next 2–3 years

In conclusion, the managing director shared expectations regarding key changes in the international marine insurance market over the next 2–3 years.

"Over the next 2–3 years, I expect artificial intelligence, including large language models, to become more widely integrated into marine underwriting workflows. Document review, the organisation of risk information and the identification of inconsistencies are areas where these tools could make a substantial contribution.

I also expect greater use of satellite information, vessel tracking and onboard sensor data to support voyage assessment, more responsive pricing and continuous compliance monitoring.

These developments will place greater importance on data quality and the ability to explain how information has influenced a decision. Human responsibility will remain essential.

More intrusive monitoring, including onboard video, may also be explored. My view is that any such use should have a clear operational purpose and proportionate safeguards for privacy. Technology should strengthen underwriting judgement and safety while preserving trust," concluded Patyrykin.

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