India to set up its first marine insurance group amidst western sanctions

India has begun consultations to set up its first protection and indemnity (P&I) entity-to be called India Club-that will provide third-party insurance to Indian ships operating in the country's coastal region and inland waterways, said Shipping Secretary T.K.Ramachandran.

- BY S VENKAT NARAYAN, OuR SPECIAL CORRESPONDENT

The plan is to get domestic companies to provide insurance cover to Indian ships, which now depend on global clubs for securing ships and cargoes, he told Mint business newspaper.

The need for an India-focused P&I entity has also been felt to reduce the country's vulnerability to international sanctions and pressures where insurance coverage is denied to shipping lines operating between countries facing sanctions.

At present, third-party risks in the shipping sector are insured with the International Group of P&I Clubs, a 13member group based in London that provides liability cover to over 90% of shipping lines globally.

Apart from fleet owners, the government may also contribute some seed money into the new P&I entity to help it get the necessary capital to start underwriting insurance.

The Union Ministry of Ports, Shipping and Waterways' (MOPSW) consultative exercise is also to form a coalition of domestic fleet owners operating in coastal and inland waterways routes and form a locally owned P&I entity. Public sector insurance companies and reinsurers would be allowed to join the insurance coalition to give the P&I entity the heft required for providing protection cover.