Sri Lanka to Lobby Lloyd's of London to Remove War Risk Tag

Strategic Insights -

Sri Lanka is expected to formally approach Lloyd's of London, a British insurance market, to reevaluate its classification of the country as a region of war. This move comes after the military defeat of the Tamil Tigers last week, which has significantly reduced the risk of conflict in the area. As a result, Sri Lanka is seeking to have the war risk tag removed, which has been a significant burden for shipping companies operating in the country. The country's Ports Authority Chairman, Priyath Bandu Wickrama, has already had preliminary discussions with Lloyd's and plans to make an official representation soon.

Key Takeaways:

  • Sri Lanka is classified as a 'region of war' by Lloyd's of London, resulting in an additional war risk premium for ships calling at the island.
  • The country plans to formally approach Lloyd's to reevaluate its classification and remove the war risk tag.
  • Prior to the military defeat of the Tamil Tigers, the group had attempted to attack the port several times.
  • International shipping to Sri Lanka has slowed, and the port has also seen a reduction in transshipment traffic.
  • Sri Lanka is seeking to attract new business, including lay-ups where idle ships are anchored for a fee.
  • Ports Authority Chairman Priyath Bandu Wickrama will make an official representation to Lloyd's and invite them to visit Sri Lanka.
  • Ship agents and owners in Sri Lanka are expected to support the initiative by lobbying Lloyd's.

Statistics:

  • The war risk premium has been a significant burden for shipping companies operating in Sri Lanka.
  • The country's ports have seen a slowdown in transshipment traffic and a reduction in international shipping.
  • The number of ships calling at the port has decreased since the military defeat of the Tamil Tigers.
  • The country's ports have also seen a significant decrease in lay-up operations.
  • No specific numbers on the exactly how many ships have stopped calling or the exact dollar amount of the extra premiums paid.

Sources:

  • "Sri Lanka to lobby Lloyd's to remove war risk tag" by The Island newspaper
  • (LBO) 26-05 1125 (Asian Pulse, May 26)