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INTERNATIONAL MARINE CLAIMS CONFERENCE PORTMARNOCK, IRELAND

INTERNATIONAL MARINE CLAIMS CONFERENCE PORTMARNOCK, IRELAND . MARKET PRACTICES – CLAIMS (AUSTRALIA) John Dawes National Manager, Marine Claims Allianz Australia Insurance Ltd. 30 th September, 2004.

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INTERNATIONAL MARINE CLAIMS CONFERENCE PORTMARNOCK, IRELAND

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  1. INTERNATIONAL MARINE CLAIMS CONFERENCEPORTMARNOCK, IRELAND MARKET PRACTICES – CLAIMS (AUSTRALIA) John Dawes National Manager, Marine Claims Allianz Australia Insurance Ltd. 30th September, 2004

  2. Australian Market- Composite submission- Declining incidence of co-insurance- Small number of players- Smaller number of recognised Leads- Relatively strong capacity A$100m+ (Euro 60m)- Loss of clients to overseas markets - Australian rates strong - Soft o/s ratings

  3. AUSTRALIA- Coastline of over 12,000 miles (20,000 klms)- Handful of Major Repairers- Limited slipway/drydock capacity- 1 Major salvor- Availability of Surveyors

  4. Initial Advice of Casualty - Normally by owner’s/insured’s broker to Lead - Occasionally by - Insured directly - Prospective surveyors/salvors - Shipping industry contacts - By phone, followed by email/fax confirmation

  5. Leader’s Response - Consultation if joint leads ( if no prior agreement) - Prompt appointment of surveyor - Assist/advise insured re possible repair facilities, appointment of surveyors/salvors etc.After Hours Assistance - Majority Claims Managers contactable 24/7 - Brokers have A.H. contact numbers (Mobile/home) - Companies have 24hr assistance lines - Responsibility of Owners to act as “prudent uninsureds”

  6. Selection of Surveyor - Responsibility of Lead - Common panels between major leads - Priorities governing appointment: 1) Expertise 2) Professionalism 3) Location – Response time 4) Cost - Appointment of surveyor by Insured rare in non- contentious claims unless only to act as superintendent re repairs.

  7. Instructions to Surveyor - Primary concerns of Lead are causation and quantum. - Report on above as soon as possible - Extent of any necessary repairs - available facilities (slipways/repair yards) - assistance required (salvors etc) - All actions/advice given to be on “WP” basis - Usually given policy details, but are not to comment on indemnity unless specifically requested to do so by Lead only. - Customary to have Service Agreements in place - Terms of engagement - Compliance requirements - Fee structure

  8. Legal Advisers - Appointment by Insured - Unusual re non-contentious matters - Possible if prospect of recovering non - insured amounts from t/p (eg Amounts below deductible) - Appointment by Lead - Selection - “Horses for Courses” - Individual practitioner rather than firm - Priorities - Similar to surveyors - Expertise re advice required - Availability - Absence of conflict of interest - Locale - Cost

  9. Legal (cont.)Instructions. - Specific and generally in writing - Claim is under control of Lead, not Legal AdvisersService Agreements. - Majority of Insurers have these in place - Terms of engagement - Service standards - Fee structure Expenses. - Normally no budget limits set - Estimates obtained prior engagement - Monitored as scope of instructions varies

  10. Loss Adjusters (as distinct from surveyors) - If appointed by Owners, quickly known by Insurers due to limited number of local alternatives - Little contact (if any) with Insurers prior to receipt of POA or full Adjustment - If appointed by Lead, ongoing dialogue. - Some Australian leads are relying more on “in house” expertise – ex adjusting personnel - Not fully accepted by all insurers

  11. Brokers Role. - Varies from almost “zero” to “extreme” - Expected Responsibilities - Initial notification to Lead - Collection/submission of Owner’s claim documentation to Lead - Obtaining owner’s agreement re settlement - Facilitating collection of claim monies - settlement funds from co-ins to Owner - co-ins proportion of fees paid by Lead - Various degrees of professionalism

  12. Reserving. - Based on reports from surveyors/adjusters re extent of repairs required & costs - Fees – Based on experienced estimate of anticipated level of involvement - Generally conservative and accurate – minimal IBNER movement - Trust in leaderLiaison with P&I Club - Rare unless potential common savings - Reduced involvement of Clubs with smaller tonnage - Liabilities underwritten by H&M insurers

  13. Counter Guarantees - Original Guarantees signed by Lead on behalf of all co-ins - Counter Guarantees normally obtained by LeadPayment of Claims - To insured via Broker - Broker’s role to collect from co-insCentral Accounting System - NoneMarket Protocol - None specific to Marine Claims - Insurance Council of Australia (ICA) - General Insurance Code of Practice - Standards / Sanctions

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