China's largest shipping company enters insurance agreement with subsidiary
Cosco Shipping Energy Transportation, a shipping company largely focused on the shipping of oil products and liquefied natural gas, has entered into an insurance services framework agreement with Cosco Shipping Insurance.
Cosco Shipping Energy Transportation and Cosco Shipping Insurance are subsidiaries of China Cosco Shipping Group, which operates as one of the largest fleets of container ships globally.
Under the agreement, Cosco Shipping Insurance will provide insurance services to Cosco Shipping Energy Transportation's vessels.
The agreement will be effective from July 1 2017 to December 31 2018, and may be renewed within 3 months before its expiry.
As an internal control policy, Cosco Shipping Energy Transportation will obtain quotations from at least two independent third party insurance companies before the purchase of insurance services from Cosco Shipping Insurance. This is to ensure that the terms and prices quoted are no less favourable than those of the independent companies.
Cosco Shipping Group had previously set up a captive insurance company, Cosco Shipping Captive, on February 17, 2017.
Cosco Shipping Captive acts at the group's insurance management platform, risk management instrument and cost management centre.
China Cosco Shipping Group had previously withdrawn its vessels from the London club, one of several clubs used by the group.
Ratings agency AM Best previously said the captive is likely to focus initially on hull and cargo insurance, it could also provide its fleet with P&I cover, supported by suitable reinsurance.
