International Group of P&I Clubs should differentiate liability reinsurance cost between ropax ferries and cruise ships due to different risk profiles of the two types of vessels, said Ben Abraham, head of global P&I at insurance broker Willis. 

Earlier, the International Group that is based in London had decided to increase the 2013-14 passenger ship allocation by 125%, largely due to the loss of the cruise ship Costa Concordia in January 2012. 

Abraham stated  there was a ‘compelling argument’ to differentiate between pure passenger ships and ro-pax ferries, where most carrying capacity is taken up by freight, because their catastrophe risk is so different.

“The increase meant, for example, that a 30,000gt ro-pax was faced with a $52,500 premium increase in one fell swoop,” Abraham said in a speech at the annual meeting of Interferry, the global ceiling organisation of the ferry industry, which was held in Malta.

“Over the last 20 years there have been five ro-pax claims into the pool amounting to $182M. This represented only 13.6% of the total cost of passenger ship claims as at 20 February 2013, so there is a very good argument for a review of the ro-pax ferry allocation,” he said in a statement.