HRA UPDATE: Designated Risk Areas – Arbitrary Lines or Useful Tools for the Illustration of Risk?

This edition of METIS Inform is a revised issue of a piece we published in May 2021. The content of that piece has since partly come to fruition, with the shipping industry noting the need for a revision of the designated areas of risk, or High-Risk Areas (HRAs), in the Indian Ocean and the need for a more dynamic and responsive approach to risk and contemporary maritime security. 

Our latest Metis Insights assesses recent changes to the BIMCO et al HRA in the Indian Ocean, and acknowledgments from key industry actors of the necessary changes to be made in global maritime security responses. 

Dryad Global analyst Sarah Knight covers:
👉HRA Strengths & Limitations
👉 Unintended Consequences
👉 Clarity of Risk
👉 Economies & Influence plus more . . .

It is beyond doubt that designated areas of risk in their current form are an important tool for maritime commercial operations, bringing much-needed clarity to the complex issue of benchmarking war risk insurance. However, it is also vital that commercial operators remain aware of the vulnerabilities in applying risk-based decision making against such areas without additional pre-transit due diligence. The process of designating areas as high risk, their utility in accurately portraying the true nature of risk in a timely manner, and their subsequent use in mandating mitigations should be subject to continuous independent review. For all commercial operators, the designation of areas as High Risk must not be taken as de facto and seen as a sufficient alternative for independent transit risk assessments. It is vital that these are sought for all commercial operations within complex environments in order to capture the true nature of risk at the time of transit. Only through such a process can commercial operators be certain to capture the true nature of risk at the time of transit. 

Access Dryad Global's Metis Insights latest report for the full analysis:

Metis Insights - WAR RISK V2 Sept 2021

 

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