Essar partly insures crude carrier overseas

Essar Shipping has partly insured its newly acquired double-hull crude carrier in the overseas market owing to the limited capacity of domestic insurers.

The Rs 385.5 crore cover for India's first double-bottom very large crude carrier, MT Ashna, was led by the New India Assurance Company. The 301,428 DWT vessel can carry two million barrels of crude oil.

Each of the four public sector general insurers have taken on an average Rs 20 crore on their books, and the General Insurance Corporation of India, the national reinsurer, has underwritten up to Rs 200 crore. The balance had to be placed in the international market.

"The risk cover was placed yesterday at internationally competitive benchmark rates," said Dinyar M Jivaasha, head and vice-president (corporate risk and insurance management), Essar group. He, however, declined to reveal the premium on the cover.

Industry sources said the cost of the cover, both hull risk and the protection indemnity cover taken in England, amounts to $1,500 a day.

Private insurers do not usually write large risks as a result of their limited capital. The second largest vessel in the country today, Jug Lavania, is owned by Great Eastern Shipping, is insured for Rs 251 crore.

MT Ashna, built in 1998 by a Korean company, measures 330 metres long and 62.6 metres high and is equivalent to three football fields and is as tall as a 20-storey building.

With this acquisition, Essar Shipping's fleet size has increased to 30 vessels with a total DWT of 1.65 million.