BOW WAVE 117

Insurance ABC Edition

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2001 WavyLine.com	Issue No 117 18 Feb 01
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Quarterpoints column on P&I Renewals
3. Port Security Conference in Vienna
4. Peter Taylor's ABC
5. Whizzo Visual Thesaurus
6. And Finally...

1. Welcome

New Readers this week include:

Larry Edokpa of SQUA Inspection Services Limited
P&I Correspondent Ida Stier in the Canary Islands Howard Wang
James Masson, Claims Man at Wellington Underwriting

This week sees your editor speaking at the Terminal Operators' Conference (Asia) in Kuala Lumpur
on Ports and Insurance. Please leave a message at the Pan Pacific Hotel if you would like to meet. Tel: 4049 4435

The Issue is a little longer this week than usual but some good pieces all the same, Our final item seems to go down well with Readers.

It is just as well that their common interest in the subjects normally covered is also joined by a sense of mirth. We are often spoiled for choice these days by Readers sending in pieces. Mercy Buckets and

Enjoy

2. Quarterpoints column on P&I Renewals

The latest Quarterpoints column by your editor, which appears on Tuesday 19FEB02 in Lloyd's List attempts to draw some themes from a renewal season in the P&I industry which is really rather quiet after all the excitement of recent years. The passing away of the fixed market competition, for now has introduced an upward tending market for prices.

Clearly the industry is in need of consolidation and the prices being charged to members in many Clubs are far too cheap. This is one reason why the more solvent Clubs are treating many of the traditionally highly mobile new business enquiries at long arm's length.

As usual we wonder what effect the dispersal in recent times of the industry to many maritime cities in the world is likely to have. Young men stationed in the major maritime centres of the world and really dealing with the market are returning to traditional centres where the Clubs are based. Some organisations seem to have the knack of recycling their experiences and others are clearly content to kick them down the stairs. This is one of the great dramas being played out in the industry, but understood by comparatively few.

3. Port Security Conference in Vienna

Reader Penny Derham,who is an executive member of the the European Airport & Seaport Police Associationn, has written in with details of the Association's work which is highly focused on the many aspects of cargo crime and fraud all around the transport bottlenecks of Europe.

The Association has good contacts with the cargo insurance industry and holds an annual conference which is full of interesting papers. The next one is in April in Vienna

Subjects to be covered include:

An Interpol view of human trafficking, The Rotterdam Connection - The breaking of a human trafficking operation, The Euro - Security and the criminal, The practical use of biometrics, A review of current technology, Container seals, Automated disaster planning - people evacuation, Computer based training and disaster management, New York - September 11 - Managing the response ,An update on events and issues in World Terrorism, The role of ALEAN (Airport Law Enforcement Agency Network) and the policing of US airports post September 11, Threats to aviation - the pilots view (IFALPA - International Federation of Airline Pilots Association ), Hold baggage screening - the Austrian test programme.

find out more at:

http://www.eaasp.org/events/vienna_2002.html

4. Peter Taylor's ABC

Once a month there is a gathering of insurance people and consultants which is held under the auspices of Peter Taylor and his Insurance Solutions Ltd. On the festive occasion of its 9th Anniversary, Peter gave an ABC of Perceptions and Reality A personal Kleine Lexicon on the world, insurance and everything. Here is an outline of his talk:

Last year generated a lot of "hype" or "spin" ,this in turn created "perceptions".

A number of seminars last year, especially with an international focus, had the theme Perceptions and Reality.

Afghanistan....The War is said to have been won, although the protagonist has yet to be caught. Panorama recently reported that this newfound peace has allowed the Poppy farmers to start up again creating the basis of a different war, that will cost more lives. A harsh Reality!

Argentina....Once seen as the brave adopter of pegging the US$, and a shining example to the rest of Latin America, has now reverted to the bad old days and had 5 Presidents in as many weeks! It has lost the plot with the international financial community.

Brazil....The country of the Future where the future never comes - yet it is the world’s second largest manufacturer of mobile ‘phones and has the third largest brewing business in the world. Not just an exporter of coffee, Brazil is also a major player in the international aviation market.Premium, by the way, is paid direct to insurers so there are no arguments, as in London, over credit periods!

CII...Great emphasis has been placed on all its changes for the better with its new e-learning capability but it lacks international support to back it up! Note also CPD verified on only 2% of membership in any one year.

Cuba....Now home to the Al Quaeda. The USA was high profile in the WTO talks in Doha but US Corporate capital still prevents its Syndicates at Lloyd’s from writing Cuban business. Please note, Mr Markel!

E- world.... Often "pushed" as the answer to the insurance industry’s distribution problems - it still requires the old fashioned marketing to get it noticed! Note: ISL’s involvement with the first "virtual" conference on insurance and financial services, which has now had over 20,000 visitors.

GISC....Ideally, the General Insurance Standards Council would like to communicate with its members by e-mail but not only are many lacking e-mail facilities, they prefer hard copy... "the dinosaurs" are alive and well.

Independent.... Here was a classic example of "Perception" which proved that you can fool most of the people most of the time until the dramatic "Reality" was exposed in June last year. Beware the company with too high a profile!

International....The visit last month of a delegation from the State Development and Planning Commission of China revealed the lack of co-ordination in London to cater for foreign visitors although we claim to be an International Financial Centre. Note: the value of the Lloyd’s Brokers who, for some unknown reason, were left out of Lloyd’s Market Study Groups after R&R! London’s problem is that there are still too many vested interests, which conveniently brings us to Lloyd's in our Alphabet.

Lloyd's....The "trumpeted" announcements that 2002 will see the largest capacity ever in Lloyd’s at £12 billion received much Press coverage. However:

(i) This fantastic new figure does not take into account the fact that it is actually about half of the Society’s capital of 10 years ago in Real terms!

(ii) No account is taken of whether the reinsurance ( up to 80%) will actually respond to the WTC claims etc.

(iii) The drop in the number of Natural Names (the core of Lloyd’s) suggests that not all were convinced about the sustainability of increased rates.

(iv) An "Underwriting Centre of Excellence" has been the message or "Perception" that has been put about. The "Reality" has been lousy results. However, Lloyd's is still winning the "Perception" game--just!

( Here, I would suggest Hype is great, as long as you don’t actually believe your own!)

LMP 2001+?....Delays by members of the International Underwriting Association were attributed to ownership by overseas interests but, surely, Lloyd’s is just as foreign-owned. Why should it should take so long ? Vested interests again?

Nigeria....Trying to return to the International fold. Massive country, massive resources and massive scams. Definitely suffering from "Perception"
but here the "Reality" check is constantly tarnished, in spite of some genuinely honest folk trying to put it right. How many of us know that there were more people killed in their religious riots, which followed the WTC, than were actually killed in the WTC? Nigeria has lost the "Perception" battle, so far. Interestingly, prior to my first trip to Nigeria, I had to take a serious dose of anti-malaria tablets only to find one mosquito in Lagos. A month later, I went to Florida ( the Mosquito State by their own admission), but anti-malaria tablets were not recommended. However, It would only take one visitor from Nigeria!

Press...Often maligned but are dependent on input from Market practitioners!
They are also the Gatekeepers to the stability and sanity of our Market.

Singapore...."Perception" - squeaky clean and well organised. Yet it had the largest Operational Risk loss ever seen in the Banking world. The irony
here is that this might have been avoided two years prior to the Barings debacle, I had taken a demo disk for Operational Risk software to the MAS, but I suspect the fellow was more concerned about the risk of corrupting his PC! On the insurance front, the Singapore Government is still delaying the final dividend from its two reinsurance companies (10 years on) because
its Tax Authorities feel there is tax due from these insolvencies! Now, talking of "Perception", Singapore punches well above its weight!

USA....Our American cousins are very good at telling us how to run our business (even Enron did not stop Mr Markel). The gap between "Perception" and "Reality" was brought home to me the other night whilst watching the documentary on the events leading up to the horror of Challenger in 1985.In one of the pre-launch scenarios, NASA was having trouble removing a bolt on the cockpit hatch --no battery-powered drill, after several attempts, was found to work -- so they used a hacksaw! Not much has changed.. After visiting Kennedy Space Centre last August, with its impressive range of technology, I was confronted with the scene of 5 men painting lines on the road. A very large pot of cement paint was being towed along on a wooden trolley into which was dipped a roller on a stick. There was no sign even of a stencil for some of the complicated road markings. (arrows)

Venezuela...."Perceptions and Reality" was the title of a seminar I attended recently on Venezuela. In the ‘60s, the country was said to have only 15 years supply of oil left. Today its national oil company PDVSA is the second largest producer in the world after Aramco in Saudi Arabia. PDVSA has more outlets in the USA than McDonalds and is also a responsible partner in OPEC. More of the "Reality" can be learned from Dick Elliott, who was in Venezuela last month for AXCO.

WTC....Change happens, we are told, only if given the impetus by a disaster. September 11 was certainly a disaster, but it changed at least two perceptions:

The Irish are no longer the world’s experts at demolition and, the Middle East can no longer be regarded as a problem that will go away, if we ignore it enough.

Xenophobia.... Considering that London is hailed as an International Centre, the London Market does not spend enough time getting to know the cultures of our foreign partners. The City’s reputation is obviously based on something.

What happened to Z? Well, I am hoping that Zimbabwe and African issues will be covered at a future "Gathering" by Mike Bennett of Hypercube, who hails originally from Zimbabwe.

See the ISL Site at

http://www.insurancesolutions.co.uk/

5. Whizzo Visual Thesaurus

Bombarded by lines and columns of words and figures as we are in this world, we should be forgiven when we have resort to the non-structured,the visual, the imaginative association of notions. For those who enjoy associating words with other words, we recommend this alternative approach to using a thesaurus, by Messrs Thinkmap.

It takes a little while to download and use. But some of our Readers might find it worth the wait.

http://www.thinkmap.com/

6. And Finally...

From Bill Fitzhugh, who specialises in the human dimension, come these highly believable and allegedly actual quotes taken from employee performance evaluations.

1. Since my last report, this employee has reached rock bottom and has started to dig.

2. I would not allow this employee to breed.

3. This employee is really not so much of a has-been, but more of a definite won't be.

4. Works well when under constant supervision and cornered like a rat in a trap.

5. When she opens her mouth, it seems that it is only to change feet.

6. He would be out of his depth in a parking lot puddle.

7. This young lady has delusions of adequacy.

8. He sets low personal standards and then consistently fails to achieve them.

9. This employee is depriving a village somewhere of an idiot.

10. This employee should go far, and the sooner he starts, the better.

11. Got a full 6-pack, but lacks the plastic thing to hold it all together.

12. A gross ignoramus - 144 times worse than an ordinary ignoramus.

13. He doesn't have ulcers, but he's a carrier.

14. I would like to go hunting with him sometime.

15. He's been working with glue too much.

16. He would argue with a signpost.

17. He brings a lot of joy whenever he leaves the room.

18. When his IQ reaches 50, he should sell.

19. If you see two people talking and one looks bored, he's the other one.

20. A photographic memory but with the lens cover glued on.

21. A prime candidate for natural de-selection.

22. Donated his brain to science before he was done using it.

23. Gates are down, the lights are flashing, but the train isn't coming.

24. He's got two brains, one is lost and the other is out looking for it.

25. If he were any more stupid, he'd have to be watered twice a week.

26. If you give him a penny for his thoughts, you'd get change.

27. If you stand close enough to him, you can hear the ocean.

28. It's hard to believe he beat out 1,000,000 other sperm.

29. One neuron short of a synapse.

30. Some drink from the fountain of knowledge; he only gargled.

31. Takes him two hours to watch 60 minutes.

32. The wheel is turning, but the hamster is dead.

33. Has a high opinion of himself due to the low standards he sets.

34. His staff will follow him anywhere, but only out of curiosity

BOW WAVE is published each week to around 6725 readers in the transport,insurance, shipping and finance industries.

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