Trends in weather-related marine cargo insurance claims: A South African perspective

Abstract

Background: Marine cargo insurance covers the loss or damage to goods while in transit. It is an important supply chain risk management tool for organisations involved in international trade, especially in regions where cargo insurance penetration is low, and protection gaps are high. However, marine cargo insurance faces new challenges because of increasing frequency and severity of extreme weather events. This study focuses on the case of South Africa: a developing country with a strategic role in connecting Africa with the global market.

Objectives: The research analyses the trends, differences, and seasonality of weather-related marine cargo insurance claims in South Africa from 2013 to 2022.

Method: Statistical and general claims analysis was performed on a master dataset of 17 727 claims to answer the three research questions related to the research objectives.

Results: The results show that weather-related marine cargo insurance claims have been increasing over the past decade, creating challenges and disruptions to the supply chain network in South Africa. Furthermore, this research shows that weather-related claims have higher average values and follow a seasonal pattern compared with non-weather-related events on supply chains in South Africa.

Conclusion: This research reveals the growing impact of weather-related events in South Africa.

Contribution: It provides practical and theoretical implications for supply chain managers and insurers to manage weather-related risks more effectively and proactively contributes to the literature by offering empirical insights from a developing country perspective, and provides considerations for future work.