This isn’t hypothetical - it’s a looming reality for many operators. Depending on the vessel’s age and design, replacing an older engine with a compliant one can double or even triple total costs.


Regulators demand cleaner vessels, insurers lag behind policy shifts, and financiers hesitate to bridge the gap continued participation in the transport system, culminating in a deadlock. The risk is that an engine failure could trigger a chain reaction of insolvencies across smaller operators, eroding confidence in the very sector the EU aims to decarbonise.


The complexity of today’s regulatory environment requires a return to consultative ‘human-first’ underwriting.


Replace checklists with flexible coverage


Rather than relying on rigid checklists, insurers need to engage directly with shipowners, engineers, and regulators to design flexible coverage that reflects real-world challenges and transition costs. This includes allowances for retrofitting downtime, fuel system upgrades,


and potential income losses during compliance-related refits.


Some forward-thinking brokers are already taking this approach, arguing that no risk should be deemed ‘uninsurable’ until it has been fully assessed. Their proactive stance is paving the way for insurance models that reward sustainability rather than penalise it.


Inland waterways carry a sizeable share of the EU’s freight, from bulk commodities to essential materials. If smaller operators are forced out by unmanageable financial risks, freight will inevitably shift to road, driving up emissions, congestion, and costs.


A modern insurance framework needs to move beyond simple asset replacement to encompass total lifecycle risk, covering compliance- driven upgrades, transition-related downtime, and long-term emissions benefits. Modular products that adjust premiums based on a vessel’s fuel type or verified carbon reduction could provide a viable solution.


Crucially, collaboration is needed. Regulators, financiers, and insurers must align on clear guidelines for the transition to low-emission vessel coverage.


Energy transition defining test for marine insurance


The crux of a marine insurers’ role is to anticipate and manage risk. There is no greater collective and existential risk than climate change itself. By embracing the shift, insurers can become catalysts of innovation rather than obstacles to it. The energy transition is a defining test for the sector, it is vital the sector take action and ‘pass’ with flying colours.


Rightly, the EU’s imperative is clear, the transition to clean energy is non-negotiable. The insurance industry must be equally decisive: this transition is insurable. Only by closing the gap between policy and protection can Europe ensure its inland shipping fleet stays afloat.


THE REPORT | MAR 2026 | ISSUE 115 | 149


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