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Houston Marine Insurance Seminar 2002. U.S. Gulf Claims More Predictable Than Ever. September 23rd, 2002. Mutual Insurance - what is it?. It is essentially co-operative self-insurance (a “Club”) The insured are also the insurers The insured\'s own the insurance fund

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houston marine insurance seminar 2002

Houston Marine Insurance Seminar 2002

U.S. Gulf Claims

More Predictable Than Ever

September 23rd, 2002

mutual insurance what is it
Mutual Insurance - what is it?
  • It is essentially co-operative self-insurance (a “Club”)
  • The insured are also the insurers
  • The insured\'s own the insurance fund
  • The aim of a mutual is to cover losses, not make a profit

Mutual insurance is different from commercial insurance

the clubs in the maritime field
The Clubs in the Maritime Field
  • The Clubs insure 95% of all ocean-going ships
  • The Clubs have cooperated for over 100 years (Pooling Agreement 1899)
  • The Clubs’ boards of directors comprise a hugely influential body of ship-owners
  • The Clubs have consistently acted in the interests of the maritime community
function of club managers
Function Of Club Managers
  • UnderwritingArrange cover; process entries, allocate calls, draw up/dispatch debit notes:
  • ClaimsHandle and reimburse claims, provide advice, approve some contracts/indemnities, decide on deviation cover, approve costs/fees;guarantees
  • InvestmentGenerate investment income on Club funds within delegated guidelines
  • Loss PreventionLegal/technical publications, claims analysis
club financial structure
Club Financial Structure

OBJECTIVE

Premiums + Investment Income = Claims + Expenses

SURPLUS = Premiums + Investment Income > Claims + Expenses

Transfer to Reserves

Return to Members

DEFICIT = Premiums + Investment Income < Claims + Expenses

Transfer from Reserves/ Reinsurance

Further call on Members

risks protection indemnity
RISKS: Protection & Indemnity
  • P&I Insurance isinsurance in respect of 3rd party liabilities
  • P&I Insurance is not
      • hull and machinery insurance,
      • war risk insurance,
      • loss of profit/freight insurance,
      • detention insurance,
      • strike insurance
      • defence
core covers in p i
Core Covers in P&I
  • Injury, illness or loss of life of passengers
  • Loss or damage to personal effects
  • Injury, illness or loss of life of crew
  • Pollution and environmental damage

Third Party Liabilities in respect of:

core covers in p i cont
Core Covers in P&I (cont.)
  • Collision
  • Dock and other Property Damage
  • Fines
  • Legal costs
  • “Omnibus cover”

Third Party Liabilities in respect of:

the world s largest p i club
The World’s Largest P&I Club

Figures in millions GT

International Group - Owned & Chartered - February 2002

members by trade type tonnage
Members by Trade Type - Tonnage

Chemical

1.0 %

GasCarrier

7.0 %

Bulk Carrier

27.3 %

Reefer

1.1 %

5.1 %

Passenger

2.4 %

Ro/Ro

Vehicle Carrier

3.8 %

Miscellaneous

1.6 %

Container

8.7 %

Specialist

0.5 %

General Cargo

3.2 %

Tanker

38.5 %

May 2002

Trade Sector Market Share (2002)

Gas Carriers 32% RoRo 16% Reefer 11% Chemical 7%

Passenger 30% Bulk 14% Combis 10%

Tankers 22% Container 12% Dry Cargo 9%

global membership
Global Membership

62.3%

55.1%

26.3%

33.7%

Club: 11.4%

World: 11.2%

age profile of the club
Age Profile of the Club
  • The Club’s tonnage age profile has reduced in the critical 15 - 19 year age band from 24% to 19% to 17%.
  • Tonnage under 10 years old increased from 31% to 40% to 41%
slide14

UK Club Reinsurance Structure

Overspill pool with other Clubs - cover available from UK Club catastrophe reserve & Swiss Re contract

US$ 4.5bn

US$ 3,030m

US $ 1470m

US$ 1000m

UK Club’s Overspill

Reinsurance

US$ 2,030m

US$ 1500m

Group’s excess R/I

US$ 1,000m

US$ 530m

Oil

Pollution

US$ 500m

US$ 30m

US$ 25m

Pool Retention

US$ 5m

Club Retention

safeguarding member quality
Safeguarding Member Quality
  • Six full-time inspectors conduct 500 ship visits a year.
  • Over 5,000 ships inspected since 1990.
    • Only 3% of inspections led to

adverse report and the number

of inspections generating a high

rating with no comment was up

from 51% to 53%

  • Unsatisfactory findings lead to

independent condition surveys

and restricted cover.

    • Surveys leading to a repair being

required fell from 45% in 2000 to

40% in 2002

crew risk management programme
Crew Risk Management Programme
  • Enhanced pre-employment medical examinations (PEME)
  • Significant pre-existing illnesses and repatriation avoided
  • Available in ten crew-supply countries
  • Unique cost-saving service
  • Development into post-repatriation care
publications videos
VIDEOS

Tanker Matters

Bulk Matters

Container Matters

Any fool can stuff a container . . . .

BOOKS & MULTIMEDIA

Major Claims Analysis

The Human Factor

Port State Control

Carefully to Carry

Loss Prevention News

UK Club News

Publications & Videos
loss prevention
Loss Prevention
  • Seminars & Workshops

around the world

  • Weekly Loss Prevention

Bulletins

  • Books, magazines &

videos

  • Full-time department in

London & specialist

regional managers

advice information
Advice & Information
  • Concentration of expertise available to all members regardless of size or premium contribution
  • Databases - Pollution legislation, conventions and procedures, legal and technical enquiries etc.
  • Past Projects - Millennium Bug (Ship 2000), ISM, STCW etc.
loss prevention developments
Loss Prevention Developments
  • New website area
  • Benchmarking
  • Good Practice
  • Technical Reports
  • “How To” guides
  • ISM Analysis
claims analysis @ 20 2 2002
Claims Analysis @ 20/2/2002

US$ millions

350

300

250

200

150

100

50

0

00

02

74

76

78

80

82

84

86

88

90

92

94

96

98

Year

major and minor claims percentages
Major and Minor Claims Percentages

By Value

By Number

Major Claims %

Minor Claims %

main types of major p i claims
Main Types of Major P&I Claims

2%

2%

8%

1%

Cargo

Collision

39%

Property Damage

Pollution

Fines

23%

Crew Injury

Wreck Removal

Non-Crew Injury

Other

2%

Unrecoverable GA

5%

8%

10%

human factors
Fatigue

Morale

Motivation

Loyalty

Training

Standards of Certification

Experience

Conditions

Environment

Language

Management Policies

Human Factors
tanker claims
Tanker Claims

A number % of all large claims in each particular country)

thomas miller americas inc
THOMAS MILLER (AMERICAS) INC.

Full Claims Handling Service

24 Hours a day in YOUR time zone

New Jersey , Miami and San Francisco

americas region
AMERICAS REGION
  • 25 experienced claims handlers in New Jersey,
  • Miami and San Francisco
  • Full authority for Claims and Guarantees
  • Immediate response on major casualties
  • Monitoring attorney performance & cost
  • Contact with agencies (e.g. Coast Guard)
  • Loss Prevention on board Cruise Ships
claims exposure in usa the reason for local service
Claims Exposure in USA -The reason for local service

25% Industry claims in USA

$ncreasing exposure of Ship-owners in USA

$ 14m a year in legal / survey fees

major claims 100 000 in usa 1987 2002
Major Claims ($100,000 +) in USA 1987/2002
  • 1014 Claims -- $422M
  • 20% of all Major Claims
  • 40% Personal Injury, 25% Cargo
  • 5%Pollution, Collision, Dock Damage
  • Numbers Decreasing - Average Value Increasing
claim since february 2000 cont
Claim Since February 2000 cont..,
  • 1,532 - CLAIMS LAWSUITS
    • TEXAS 567 289
    • FLORIDA 255 164
    • LOUISIANA 612 219
    • ALABAMA 84 16
    • MISSISSIPPI 14 2

1,532 690

mediation
Mediation
  • TEXAS 289 - 122
  • FLORIDA 164 - 111
  • LOUISIANA 219 - 73
  • ALABAMA 16 - 4
  • MISSISSIPPI 2 - 0
4 factors influencing claims trends in the us gulf
4 Factors Influencing Claims Trends In The US Gulf

1. Corporate

A New Type of Owner

2. Legal

2. Legal

Is it possible to try a case?

Hard or soft Market…..

3. The Insurance Market

Does It Really Make A Difference?

How so few influence so much?

4. Personalities

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