Aon has launched a new fuel insurance solution, designed to help companies – including shipping lines – protect against rising fuel costs.
Backed by AAA-rated credit insurance, the coverage will be activated if the cost of fuel rises and exceeds an agreed limit providing shipowners with an alternative to bunker hedging. The policy will cover the difference between the agreed price and the higher price, paid out monthly, to help companies manage their fuel cost exposure and avoid significant spikes in market price.
Chris Bhatt, global head of sales, marine, Aon, said: “Aon is committed to identifying, understanding and developing innovative solutions to meet our clients’ evolving needs. With the launch of this solution, we are pleased to support our clients as they navigate an increasingly complex commercial environment and address long-tail risks to promote corporate resiliency and sustainability.”
Bunker fuel prices have been creeping up in recent weeks. Analysis published on Sunday from Copenhagen’s Sea-Intelligence shows for VLSFO fuel, the price has increased 35% from November 1, 2020 to January 8, 2021.
It’s not actually the first. Paratus Maritime Insurance Limited has had policies available since August 2020.