9Insurance Business ReviewDECEMBER 2025inclusive and pragmatic insurance approach can help bridge this gap and encourage broader sectoral alignment with climate goals. Voluntary Frameworks: The Poseidon PrinciplesWhile regulations like IMO and FuelEU are mandatory, the Poseidon Principles represent a voluntary initiative developed by financial institutions and marine insurers. Originally launched by major lenders to align ship finance portfolios with climate objectives, the insurance arm of the Poseidon Principles builds on the same methodology, measuring the carbon intensity of insured fleets against decarbonization trajectories.The adoption of these principles by insurers is not required by law. However, they signal a broader movement within the industry to embrace climate accountability, transparency and standardization. These frameworks offer practical tools for integrating ESG factors into underwriting, but they also raise critical questions.In the April 2025 Poseidon Principles annual report, both signatory banks and insurers reported that their portfolios had not, on average, met the decarbonization alignment targets. This shortfall prompts reflection: is the sector lagging in its transition--or are there structural issues with the way performance is being measured? Are the indexes and methodologies--such as the well-to-wake CO2-equivalent emissions metric--truly suited to the operational realities of global shipping? As these voluntary frameworks mature, aligning intention with implementation will be crucial. Metrics must not only be rigorous but also practical and adaptable to the technological diversity and transitional pace of the industry.More importantly, for the insurance community, it remains unclear how these insights will concretely influence underwriting behavior. Will insurers raise premiums for clients with poor emissions profiles? Will they restrict capacity or decline to cover certain types of vessels altogether? As of now, the Insurance industry has not communicated a uniform approach and the actual consequences for insureds are still evolving. What is clear, however, is that greater transparency is needed on how environmental performance will be priced into risk.Collaboration Will Be KeyThe road to net zero will not be a linear one. It will take decades and progress will vary widely between regions and vessel types. This makes collaboration essential. Ship owners, regulators, technology developers, insurers, brokers and financial institutions must align--not just in principle but in practice.Insurance has a critical role to play. By fostering innovation, supporting loss prevention and facilitating responsible investment in sustainable technologies, insurers can act as both enablers and accelerators of change. Risk-sharing must be paired with knowledge-sharing and underwriting must evolve from a backward-looking assessment to a forward-looking partnership.There is no single solution to decarbonizing the cruising industry. But there is a clear path: innovation, collaboration and leadership. For insurers, the challenge is not only to keep pace but to help steer the course. The path to net zero demands not just risk coverage but active collaboration across the entire marine ecosystem.
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