Fire Claims The Cause & Cost An Insurers View Karl Lumbers London 13th March 2003

1. UK P&I CLUB Fire ClaimsThe Cause & CostAn Insurers ViewKarl LumbersLondon13th March 2003

2. Source of Data • Overview of large cargo claims • Cause of large fire cargo claims • Risk Profile

3. Data • Source • Claims Files • Criteria • 100,000 usd • Cargo Liabilities • Period • 15 years • Sample size • 68 No 59$m Value 2002

4. Fire costs the industry over 20$m (Est) in large cargo claims a year

5. Cause of Large Cargo Claims

6. Cause of Large Cargo Claims 9th by No 2nd by Value

7. Large Fire Cargo Claims Average Claim Value

8. Type of Cargoes Involved

9. Large Fire Claims by Value 6 x 1$m +

10. Risk in Insurance Terms Risk = Frequency x Consequence Fire Risk = Low/Medium(4.5) x High (860,000usd)

11. What Causes Fire Claims Software Failure or Hardware Failure

12. “To err is human, indeed it is the cause of most of Our misery. Invariably though it is to the gods that we look for remedy” Livy

13. “ Human Error is the cause of most of our misery and it is to the clubs that we look for reimbursement”

14. Software v Hardware Failure

15. Human Failure High proportion of shore side input

16. Origin of Large Cargo Claim Fires (Where known)

17. One of our most common findings !!!! Daily Use Tank Deadman lashed in open position Glass replaced with plastic tube 2002

18. Fuel Oil DB Tank - Sounding Pipe 2002

19. Sophisticated Cabin Heating !!!! Note paper to protect deck 3/2003

20. Plain Language !!!!! 2002 2002

21. Tragic Consquences - 3 Deaths Before After 2001 2000

22. What Contributed to the Fire(Where known) Fishmeal Tobacco Cotton Woodpulp Coal

23. What Type of Ship has Fires $m

24. What Type of Ship has Fires % number fire claims far exceeds % no cargo ships in Club

25. Is Age of Ship Relevant ?

26. Age Band of Ships with Large Fire Claims % number of fire claims far exceed % Club entry For 15-19 yr age band

27. Size of Ships with Large Fire Claims

28. Size of Ships with Large Fire Claims % number of fire claims far exceeds % entry of 10,000gt - 30,000gt ships in Club

29. 10 out of 68 fires occurred in port • 52 of the ships were tramping • 17 ships were on Voyage Charter • 35 ships were on Time Charter

30. JurisdictionTop 7 (3%) % figures where fires occurred 3% 9% 8 % 3% 3% 1%

31. Large Fire Caused Cargo Claims Trend

32. Risk Profile • Dry Cargo ship • 10,000gt - 30,000gt • 15 – 19 years old • Tramping • Time Charter • Spontaneous combustion/Discarded cigarettes • Shore input

33. What Can We Do ?

34. Know your cargo • Ensure a Good Cargo Watch is maintained • Enforce No Smoking Practices