BOW WAVE 203

Petit Chablis Shortage Edition

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2003 WavyLine.com	Issue No 203 13 Oct 03
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Quarterpoints: Marinos feel Maemi's cold draught
3. Fortis Looking to Recover some Rail Crash Losses
4. Ifpta Newsletter Well Worth Reading
5. Loadline.com
6. And Finally...

1. Welcome

Taken from Jonathan Raban's Waxwings--a novel set in the months before and after the arrival of the new millennium-- is a stomach-churning description of the contents of a sea container used by 15 stowaways from Hong Kong to Seattle. All in all a novel worth reading for its take on those strange times we passed through:-.

Inside, the flashlight beams wandered, crossed, and came to a brief shuddering halt whenever they found something recognizable in the putrid darkness of the container: a scarlet JAL airline bag; a car battery, evidently dead, with wires running to a six inch fan and a lamp clipped to metal flange above the doorway; a heap of empty plastic water cans; four stacks of thin mattresses, ranged along the wall like a low couch, with neatly folded blankets on top; a dishevelled magazine; a backpack; a toothbrush; a plastic bucket.

The soles of the men's shoes made a crackling noise as they came unstuck from the floor with each new step. The flashlights showed a surface glazed with something that had once been liquid but was now so thickly embedded with crumbs, hair, and dirt that it had taken on the texture of an old and filthy carpet. There will still enough pale flecks of colour to identify it as a layer of dried vomit...

(Picador, 2003 p39-40)

New Readers this week include:

Frans A. Dieleman in the Netherlands
Claims Adjuster Anuj Jethwa Toplis and Harding in Tanzania Frank Mathiesen of Pimic
Chris de Jong of Roseville, NSW, Australia
Mick Miller of R&SA NZ
Marek Dubovec

News of Readers

El Vinos

Whilst taking a glass or two in El Vinos the other day with Neil Grimston, the secure e-mail specialist, we learned that there had been a distinct shortage of good cold dry white wine at this gathering place for city types, scribblers and legal hacks during this late last lost hot summer, a scarcity greeting the demand for Petit Chablis or Aligote. El Vinos had problems during the Gulf War, says Anthony Mitchell, the proprietor, as his shipments from South America, New Zealand and Australia were constantly delayed.

"Well, last week", he says, "I found out why when I was lucky enough to be invited to a debrief of the Gulf War by the RAF. I discovered some fascinating detail that never appears in the press. The reason for my stock delays became clear--the RAF commandeered 5200 empty containers to ship goods to Kuwait. So none went back to our producers for the stowage of wine". A likely story.

http://www.elvino.co.uk

World Maritime University

Reader Cecilia Denne works in the World Maritime University library in Malmo. She says the University has an intake of about 100 students each year and they do a 17 month course leading to a master's degree. Most of the students are from developing countries. There is a also a short course (9 months) for the very brilliant students. The main courses are Shipping Management, Port Management, Maritime Education and Training, Maritime Administration and Maritime Administration Environmental Protection.

Cecilia.Denne@wmu.se

Readers Write:

Bill Fitzhugh writes:

Excellent 'And Finally' (Bow Wave Issue 202). However, alongside 'two eggs short of an omelette' and 'a couple of sandwiches short of a picnic' we can now add '4 lines short of a sonnet'.

(Bill specialises in the business of outplacement-ed)

Contact him at:

FitzHughCareerMgt@compuserve.com

Marco Tapia writes:

I thought your Readers would be interested in how one local paper is reporting the proposed closing of the remaining container terminals in Sydney Harbour.

http://www.smh.com.au/articles/2003/10/05/1065292476523.html

(The citizens of Sydney have, like the citizens of London's Docklands, have long known that in a post modern economy,the oppoortunity cost of running second class port facilities are far too high when compared to the financial delights of waterfront property and lifestyle-ed).

Contact Marco at:

marco.tapia@picnet.com.au

A packed edition for you this week, coming from an English autumn which still carries reminders of a fine summer past.

Enjoy.

2. Quarterpoints: Marinos feel Maemi's Cold Draught

Your editor's most recent column for Lloyd's List pondered a little more how things can go on in this part of the insurance world:-

The vibe from Seville at this year’s IUMI conference was more than usually downbeat. One correspondent who knows the industry extremely well and who likes to remain nameless wrote:

"Most agree that Marine Insurance and particularly Marine Hull Insurance is at a cross-roads and affirmative action is desperately needed if we are not to attend a variety of funerals soon."

For this gloomy (and correct) prognostication he offered the following evidence:

-- for every 1% interest drop, the technical combined loss ratio needs to improve by 2%;

--the energy market is a very seedy case indeed. The years between 1996 to 2000 produced $ 1 billion in premium yet claimed $ 1.9 billion in losses;
--the hull market has in recent years eroded by $ 6 billion in value which is more that twice the value of the current premium income;
--Lloyds results for hull have produced red ink for 6 years (1997 to 2002) , as have those for France, Germany, and Norway. This is hardly as surprise since what used to produce $ 4 to $5 in premiums in 1995 was available in 2000 for less than a Dollar.

Has the time come for another good old-fashioned market collapse? The answer is in the hands of those who are providing the marine market players with their reinsurance. It is certainly thinkable that some of these will have had enough by the end of this year. 2003 was supposed to be the time when rates climbed and the reinsurers started to rebuild their capital. In fact the market has shown signs of softening in some areas and the run of casualties in 2003 has been far from benign.

Take the most recent (and in some ways the most surprising) of the losses recorded this year arising out of Typhoon Maemi. Here an astonishingly destructive wind produced what is beginning to look like a seriously large marine casualty in all its facets. This is not unconnected to the fact that some 80 per cent of the containerised throughput of a major Far Eastern economy pass through the port of Busan which is also a shipbuilding centre. Claims handlers are already opening files on 10 LNG newbuildings, a semi-submersible craft, an FPSO and several tankers which suffered extensive damage. There are eight collapsed and three derailed container cranes for the engineers and manufacturers to have a look at and of the 2800 containers which suffered flooding, many contained cargo. These at least can be estimated at around $30 000 per teu as a rough rule of thumb. According to one well-placed source in the reinsurance industry the non-marine property market has copped a larger than usual amount of loss on the various property losses, not least the on the well publicised $ 15 million "hotel ship" which was blown onshore.

It will be interesting to see how the various interests and insurers affected by the loss will find their way to the reinsurers. Korea is one of those places where the local companies seem entitled to insure everything and then lay off 99.5 per cent of the risk into other markets. In the bad old days of the Lloyd’s spiral this kind of loss would go round and round the same old houses as the claims were unwound over a period of many years. Where are the losses of a casualty like Busan likely to go in a market where capacity has become smaller and more concentrated? Many suspect that sooner or later a part of most of the individual losses will find their way to the gentlemen of Munich, Zurich or Hamilton, for in truth there are not that many addresses left in the world where this kind of business risk tends to go for reinsurance.

It used to be before the great soft market of the late 1990s that you could sample the temper of the market during the summer months. Insurers would let it be known that they were not so keen on this kind of business or account. Brokers could enter the post summer season armed with the knowledge that would have to look elsewhere for cover or attractive prices. This
kind of slow motion signalling seems to have atrophied in the market since September 11, 2001.

So the question the delegates returned home from IUMI will be asking themselves is will those in line to pay out again roll with the punches, write their cheques and carry on regardless as in previous years or will they cry "Basta"?

3. Fortis Looking to Recover some Rail Crash Losses

An insight into modern liability conditions in the UK came to light recently in an article by Niel Hodge in Business Insurance. The story reported that

Fortis Insurance Ltd is suing a UK government agency in to try and recover some of the £22 million ($36.5 million) it has already paid out to compensate victims of a well known rail disaster in 2001.
The Eastleigh, Hampshire-based office of Fortis Insurance, which is part of the Dutch-Belgian financial services group Fortis, insured driver Gary Hart who caused the Feb. 28, 2001, accident when his vehicle slid off a highway in bad weather and came to rest on a railroad track. The vehicle was subsequently struck by a passenger train, which derailed and collided with an oncoming freight train. Ten people were killed and a further 76 were injured.

The driver, Gary Hart, was found responsible for the crash and was sentenced to five years in jail.

In its suit, however, which was filed in the High Court in London, Fortis argues that the Highways Agency, the government body in charge of road maintenance and safety, was partly responsible for the accident and should share the costs.The insurer maintains that crash barriers on the M62 motorway bridge were not sufficient to prevent an accident. Fortis Insurance believes that this catastrophic rail accident would not have occurred if the Highways Agency had discharged its duty to assess the appropriate safety measures, the insurer said in a statement. Fortis has settled 47 of the claims arising from the accident, with another 47 still remaining. It has already paid more than £22 million to victims and their families and said it expects its total payout to be about £34 million ($56.4 million).

http://www.businessinsurance.com/

4. Ifpta Newsletter Well Worth Reading

David Cheslin recently drew our attention to the rather fine website and newsletter run by this trade body for forest products (paper and cardboard to you and me). The item on Harry Potter describes the association's rather laudable point of view.

http://www.ifpta.org/journal/Harry%20Potter/Harry1.htm

5. Loadline.com

Loadline.com is run by a Bow Wave Reader who is a former mariner still working in the shipping industry and the venture particularly specialise in marine related domain names.

This site carries what it describes as one of the best collections of marine domain names currently for sale on the Internet - "browsers can have a look and see if any of the names would help enhance their business or organisation. prices are advertised and transfers can usually be arranged very promptly".

Here is a sample of the shipping related, boating related or general category domain names on offer:

Shipping names such as Bulker.com, CableShip.com, CadetShip.com, CharterParty.com, ContainerShip.net, FindCrew.com, Hatchcover.com, ISPScode.com, MarineLaw.org, MarineLawyer.org, Shipowner.com, Shipowners.org and SupportShip.com are currently available. There is also a good selection of survey names such as MarineSurvey.net, MarineSurveyor.info, ShipCheck.com, ShipInspect.com, ShipSurveyor.com and ShipSurveys.com,

Boating names available for sale include Berth.org, BoatSurvey.com/.net, BoatSurveys.com/.net, FindCrew.com, GreatSails.com, SeawayCode.com and SetCourse.com.

Also included are some general names including people / place names such as Amorgos.org, Balboa.org, Breskens.org, Oord.com, Paphos.org and Sete.org; and generic domains such as Attend.net, Budgerigar.net and Chuckle.org.

Contact:

http://www.loadline.com

email:info@loadline.com

6. And Finally...

Many thanks to marine artist Gordon Frickers for these juvenile perspectives:-

These are allegedly extracts of 5th and 6th graders' answers given on history tests and in Sunday school quizzes.They were collected over a period of three years by two teachers.

Ancient Egypt was old. It was inhabited by gypsies and mummies who all wrote in hydraulics. They lived in the Sarah Dessert.

The climate of the Sarah is such that all the inhabitants have to live elsewhere.

Moses led the Hebrew slaves to the Red Sea where they made unleavened bread, which is bread made without any ingredients. Moses went up on Mount Cyanide to get the ten commandos. He died before he ever reached Canada but the commandos made it.

Solomon had three hundred wives and seven hundred porcupines. He was a actual hysterical figure as well as being in the bible. It sounds like he was sort of busy too.

The Greeks were a highly sculptured people, and without them we wouldn't have history. The Greeks also had myths. A myth is a young female moth.

Socrates was a famous old Greek teacher who went around giving people advice. They killed him. He later died from an overdose of wedlock which is apparently poisonous. After his death, his career suffered a dramatic decline.

In the first Olympic games, Greeks ran races, jumped, hurled biscuits,and threw the java. The games were messier then than they show on TV now.

Julius Caesar extinguished himself on the battlefields of Gaul. The Ides of March murdered him because they thought he was going to be made king. Dying,he gasped out: "Same to you, Brutus."

Joan of Arc was burnt to a steak and was canonized by Bernard Shaw for reasons I don't really understand. The English and French still have problems.

Queen Elizabeth was the "Virgin Queen," As a queen she was a success. When she exposed herself before her troops they all shouted "hurrah!" and
that was the end of the fighting for a long while.

It was an age of great inventions and discoveries. Gutenberg invented removable type and the Bible. Another important invention was the circulation of blood.

Sir Walter Raleigh is a historical figure because he invented cigarettes and started smoking.

Sir Francis Drake circumcised the world with a 100 foot clipper which was very dangerous to all his men.

The greatest writer of the Renaissance was William Shakespeare. He was born in the year 1564, supposedly on his birthday. He never made such money and is famous only because of his plays. He wrote tragedies, comedies, and hysterectomies, all in Islamic pentameter.

Writing at the same time as Shakespeare was Miguel Cervantes. He wrote Donkey Hote. The next great author was John Milton. Milton wrote Paradise Lost. Since then no one ever found it.

Delegates from the original 13 states formed the
Contented Congress. Thomas Jefferson, a Virgin,
and Benjamin Franklin were two singers of the
Declaration of Independence. Franklin discovered
electricity by rubbing two cats backward and also declared, "A horse divided against itself cannot stand." He was a naturalist for sure. Franklin
died in 1790 and is still dead.

Johann Bach wrote a great many musical compositions and had a large number of children. In between he practiced on an old spinster which he kept up
in his attic. Bach died from 1750 to the present. Bach was the most famous composer in the world and so was Handel. Handel was half German, half Italian, and half English. He was very large.

Beethoven wrote music even though he was deaf. He was so deaf that he wrote loud music and became the father of rock and roll. He took long walks in the forest even when everyone was calling for him. Beethoven expired in 1827 and later died for this.

The nineteenth century was a time of a great many thoughts and inventions. People stopped reproducing by hand and started reproducing by machine. The
invention of the steamboat caused a network of
rivers to spring up.

Louis Pasteur discovered a cure for rabbits but I don't know why.

Charles Darwin was a naturalist. He wrote the Organ of the Species. It was very long people got upset about it and had trials to see if it was really true. He sort of said God's days were not just 24 hours but without watches who knew anyhow? I don't get it.

Madman Curie discovered radio. She was the first woman to do what she did. Other women have become scientists since her but they didn't get to find radios because they were already taken.

Karl Marx was one of the Marx Brothers. The other three were in the movies. Karl made speeches and started revolutions. Someone in the family had to have a job, I guess.

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