First, it had to get to grips with the unitised cargo revolution, and then with its consequences: ever more costly and larger ships and equipment, and changing work practices.

As far as ports are concerned, insurance has clearly met those challenges, and has done so experiencing much less volatility than in the notoriously tricky marine hull and machinery sector. Relationships between insurer and insured are generally first-class, and there is a degree of respect that is the envy of some other sectors.

Today the success of the substantial mutual, the TT Club, and some of its fixed premium competitors, has brought some stability to the scene, but there remain considerable challenges, as one of the sector’s leading Lloyd’s brokers, Tim Kyd, underlines.

Both physical damage and liability exposures pose a considerable hazard for every port operator, and for their insurance carriers.

Mr Kyd says that care is essential not merely in assessing and insuring the individual equipment and values involved - the big container cranes can easily cost $10m apiece – but in calculating the wider impact on client and market alike.

A marine executive director for Aon, Mr Kyd, who has been in the market for some 47 years, says that underwriters must make a priority of calculating their potential accumulations of loss, in the major catastrophe areas. Are the clients protected properly, and are underwriters similarly protected through their own books and through reinsurance? Are the underwriters accurately costing the aggregates they are allowed to write? Ports in the US Gulf, Caribbean and Far East are especially vulnerable to natural disaster: even a simple power outage can cause widespread havoc or operational paralysis.

Half a century ago, Lloyd’s had a sure grip on the whole of the marine market, including the ports sector. At the inspiration of US businessman Malcolm McLean, a few ships had already been converted to handle containers, and as the system spread, insurers had to puzzle the most rational way to apply their services. A natural home for the new type of risks appeared to be shipping’s powerful protection and indemnity clubs, but the shipowner P&I directors were rightly wary of taking on a whole range of risks that shaded into general transport and shore assets and property. Among other concerns, P&I would have had to reckon much more regularly with windstorm loss as well as operational loss.

This was the origin of a separate vehicle for such risks, the TT Club, which is celebrating its 40^th anniversary this year.  The mutual was formed, just as the first cellular containership took to the seas, to handle the boom in the container industry, which has been its principal focus all along, although it is now looking to add business from bulk terminals.

Over the years, Mr Kyd has witnessed a huge change in the attitude to risk management by both port and terminal operators and insurers. He says the big facilities in particular manage the safety questions better, and port managers and their staff have become much more conscious of these issues.

For him and his counterparts in the broking field, London has become a much more professional and better run market place, since the asbestos and pollution claims traumas of the 1980s and 1990s sent shudders through Lloyd’s and many outside insurance companies, and resulted in organisational and regulatory reforms.

Most underwriters at Lloyd’s now have to report to corporate capital providers, who take a strict line on profit and value for money: “[premium] volume is vanity, profit is sanity", as one reinsurer famously commented.  The number of syndicates at Lloyd’s has shrunk, notably those with marine specialities, and the underwriters, who as part of composite businesses can no longer act like dictators, co-operate more constructively to get the right products for the client.  Indeed the underwriters are more eager than ever to travel the world to see their clients, to accelerate the flow of information and to develop mutual confidence and relationships.

At one time, brokers would have to make the rounds of up to 50 underwriters to get their policy slip completed. Their tasks today are less tiring, although syndication across sectors is still the way for some of the larger risk packages which necessitate high insured limits for marine property and equipment. For instance, the TT Club might share a placement with, say, Wavelength, a ports consortium of Lloyd’s underwriters. Competition comes from regional markets which are often involved in the bidding, and capacity from half a dozen of those could be accepted on a given risk.

Premium rates for port-based risks have always had more gentle ups and downs than the insurance market as a whole, but they did share in the upswing of re-rating in the wake of the dreadful Atlantic hurricane season of 2005.

That was a short-lived spike, however, and rates have settled back, especially with the ports industry, and insured business globally, having little cause to table claims since the end of 2005. Rates are presently moving down, and most insurers accept that they will have to make further concessions in the second half of 2008, if benign conditions persist.

As ports have grown in size and in their ability to handle the big ships, this has called for bigger and better terminal equipment – the type of risk posed was illustrated in the UK this year by windstorm damage to cranes at Southampton and Felixstowe. Even so, the main worries for the average container terminal operator are those concerned with bodily injury claims.  It is little wonder that the TT Club and others have reinforced their loss prevention efforts.

Liability costs for personal injury continue to soar, and not just in the US.  A sign of the current climate has been the introduction in the UK on April 6, 2008 of the Corporate Manslaughter Act, which will hover over the operations of companies, organisations and government bodies, including UK registered ships and offshore structures and ships within UK territorial waters. 

Companies will face unlimited fines if their senior managers are found to have contravened health and safety requirements, causing death by gross negligence.

Looking ahead, Mr Kyd foresees that the peaks of activity for ports and their insurers will centre on the personal injury caseload, rather than on property damage. After all, boxes are easily replaced, whereas injury opens the way for a company to be sued for huge sums in the courts, especially in the US.

New facilities and operations may mean more incidents, but this is by no means certain. Mr Kyd says: "The risk management has improved considerably, and the equipment is better.” On the insurance side of the equation, “there are going to be far more opportunities for insurers; for instance, in China, the insurance industry is opening up. The risk will probably be spread around much more."