Danish shipping holds significant strategic value for Denmark. Recently, a legislative proposal has been introduced to activate the War Insurance Institute, aimed at safeguarding the Danish merchant fleet’s insurance coverage, particularly in the event of war.
This initiative is essential as it ensures the fleet can remain operational, especially during a time when the commercial insurance sector may falter due to conflict. The necessity for a war insurance scheme is underscored by the challenges that war could pose to both Denmark and its shipping companies.
Anne H. Steffensen, CEO of Danish Shipping, emphasized the importance of this timing, stating that being adequately insured is always prudent. While shipping companies currently rely on the commercial insurance market, the activation of the War Insurance Institute will guarantee that operations can continue even under extraordinary circumstances.
Steffensen expressed her hope that the scheme would never need to be implemented. The proposal outlines a state loan guarantee of six billion kroner to fund the War Insurance Institute upon its activation.
Morten Bødskov, the Minister for Industry, Business, and Financial Affairs, highlighted the importance of readiness in today’s uncertain global environment marked by rising tensions and conflict in Europe. He noted that maintaining the operational status of the Danish merchant fleet is crucial due to Denmark’s standing as one of the world’s largest maritime nations.
The allocated loan facility is intended to provide liquidity for the Institute when activated and will later be reimbursed through contributions from shipping companies. This framework ensures funding comes from the industry while being supported by a state-backed credit line.
The legislative proposal will undergo consultation and is anticipated to be presented in October.