BOW WAVE 291

Bow Wave Issue 291--Soft Edition

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2005 WavyLine.com	Issue No 291 20 Jun 05
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Quarterpoints
3. SIN Revisited
4. SOP is 150
5. White Night Riders Home and Safe
6. And Finally...

1. Welcome

Poem of the Week

In the Santa Clarita Valley

Like skinny wildweed flowers sticking up
hexagonal "Denny's" sign
starry "Carl's"
loopy "McDonald's"
eight-petaled yellow "Shell"
blue-and-white "Mobil" with the big red "O"

growing in the asphalt riparian zone
by the soft roar of the flow
of Interstate 5.

Gary Snyder from Danger on Peaks

New Readers this week include:

Claims person Catherine Cawte of Swires Shipping in Sydney
Richard Eames of Taylor Marine
Mark Keenor of Brookes Bell
Michael Powell Director (Maritime) of CHIRP
Nick Overton of Overtons Costs Consultants
Tony Dixon, Director of Braemar Seascope
Avocat Henri de Richemont in Paris

News of Readers

Anne Kappel and Charles Diorio have joined the staff of the World Shipping Council, the Washington, D.C.-based trade association which represents the liner shipping industry.

Judy Crick has joined Meridian Risk Solutions, a part of brokers Newman Martin and Buchan

Clive Nix has joined the Navigators in London

AfterOfficeHours News

Firms who have joined AfterOfficeHours this week include our first law firm in Hong Kong,

Jonathan Rostron Solicitors

Frequently Asked Questions

Question 1:

I already have a website. What can AfterOfficeHours do for my firm that Google doesn't do already?

Answer:
Type in the words "Marine" "Surveyor" "Antwerp" into Google and you will be presented with 980 selections to sift. Hardly the thing in the circumstances of a late night emergency. AfterOfficeHours has two search methods. The basic search scans the pages of subscribers and returns a result. The advanced search will search against a name, a road, a town or a date and return a much more filtered return. If all you can remember is a name or a building, the advanced search will try and find it in the subject listings.
Question 2:

I'm already on the Web. Why do I need AfterOfficeHours as well?

Answer:
A further practical advantage for subscribers is the ease with which they can update their entries on AfterOfficeHours. No special html tags or other marking up is required. Entries can be changed daily without difficulty. Subscribers can reclaim the flexibility of the web without going through the webmasters, IT departments , webdesigners, or slow moving committees.

Question 3

My firm already appears in the directories of various clubs and insurers. Why should I list in AfterOfficeHours?

Answer:
Work available through the Clubs and Insurers is highly sought after and in short supply. Correspondents and agents are suitable business partners for other parties who have a need for a local presence and local knowledge. Use After OfficeHours to inform the world of what you can do.

AfterOfficeHours Subscription Rates

Basic Subscription £250
Silver Subscription £600
Private Directory £tba

There is a Free 3 Month Trial Period
Register at:-
http://www.afterofficehours.com

Greetings from a part of the world which has just about begun to produce something that looks like summer. And some thoughts on things to come in item 2.

Enjoy.

2. Quarterpoints

Your editor's recent column in Lloyd's List this week addressed the softening insurance market and what may come upon us as a result.

Heading South

Quarterpoints for June

Marine insurance is a cyclical business and nothing which has happened since the autumn of 2001, when the hardening of insurance rates and a shortage of capacity took place in an unusually dramatic way, has served to suggest that the nature of cyclicality has much changed. Thus this year, in the places where the large trends are discussed, the bets are being placed. The expectations are that the southward part of the cycle has commenced, will commence and is commencing. A certain number of things follow from this expectation of falling rates.

The great hardening of 2001, as dramatic as it was in the aftermath of the WTC outrage, has not necessarily helped those who needed it most to advance even beyond a status quo ante. That is to say, companies whose solvency was wilting throughout the long soft cycle which began in the second half of the 1990s have not necessarily managed to replenish their capital back to where it was even in the late 1990s. In rating terms almost the entire industry went down at least a peg or two and very few have managed to regain their best ratings. The industry survived the great shock of 911 quite well, but it enters a new soft cycle in less robust health and with more question marks hovering over its prospects.

For instance:

The attorney general of New York has helped to lay bare that the model of distribution and the costs of distribution for marine and all the rest of the international marketplace are unsustainable. The large, well distributed insurance broker with offices spread all over the earth which feeds a relatively passive metropolitan insurance market is dear and fewer people in the market want to pay the full cost of it. The post-Spitzer era of transparency will repeatedly demonstrate this over the next few years.

Core parts of the marine market have not achieved the increases they should have. The Hull market remains in a sickly condition and the P&I Clubs between them have not garnered in the increases they hoped to in the last few years. Owners who know this will continue the bifurcation of the mutual industry into haves and have nots. In the slow moving, rather isometric competition between the Clubs, even the best have half empty war chests.

The roads leading to reinsurance are numbered and the great reinsurers are fewer in number and not necessarily grander than they were in the 1990s. In at least one of these big battallions a considerable generational change is going on, the old guard leaving the field. When you stop to consider that the professional reinsurer concerned has a staff of not much more than 1000 souls, it will be interesting to see how well the newer, younger fellows get on. During the depths of the next cycle, the fates of some primary insurers will depend on it.

2005 may be seen by historians of the industry as the high tide of the present era of consolidation. The fall of the Greenberg hegemony--largely a consequence of events in non-marine markets-- has brought a pause in the rise and rise of the large and a fall in the ability of the very large organisations to muscle the rest of the world into doing as they wish. The human squalor of the highly centralised commercial insurance organisation will keep many us enthralled in the years ahead as the story is told of how boards of directors failed to attend to their duties, how men obsessed with control drove the show with the help of compliant executives not quite up to the task, and how some of the largest players in the industry created a way of working which resembled the efforts of ringers at certain furniture auctions in the East of England. Will a fall in rates over many years do much to dispel the unwanted notes of grubbiness to which insurance is prone in its darker hours?

The dramatic circumstances of the post 911 insurance market permitted that certain reluctance of the marine market to fully enter into the logic of the internet age. The era of dispersal of operations, of management via video conference, of lightening fast administration and accounting and rapid feedback cycles has not entirely taken up the center stage. Hats are this summer being hung on compliance, the need for contract certainty, the wants of regulators. The London market has a big investment sunk in Kinnect which has it all to play for in 2005, not least in the recruitment of an enthusiastic marine marketplace. At the time of writing, large financial entities are solemnly e-mailing scans of documents to each other in the popular .pdf adobe acrobat format (free on the internet) and the standard for turnarounds, document production and accounts administration is still remarkably lethargic in many sectors.

Along with the internet revolution which has not quite happened in marine insurance, there is the tilting of the center of market gravity to the western pacific and China. The marine insurance market enters the softening era in relatively poor long term shape in these markets, which have been glutted with cheap rates, sketchy local infrastructure, high costs in the traditional centers of insurance and people in senior insurance positions who have no history of living and working in the strategic markets of the future. The Chiracs and Schroeders of our industry.

The soft cycles of insurance always begin with a determination to stick to the games plan of the
preceding hard phase and a denial that the ground is shifting beneath the feet of the market. Soft cycles end with an avowed return to fundamentals an assertion of control, a return to proper
standards, a determination to get the right rate
for the risk.

3. SIN Revisited

To No 3 Lower Thames Street this week to visit the new offices of Clarksons in their visibly well badged new building to hear about the relaunch of their Shipping Intelligence Network. This site is the web based manifestation of a very deep attention to shipping detail. It was not surprising to learn that the largest group of users contained the researchers themselves. For this is a network of customers and Clarkson intelligence providers with relatively little for the casual browser. But you can see something of the firm's highly analytical approach at:-

http://www.clarksons.net/sin2003/index/index.asp

4. SOP is 150

To the Gibson Hall at the corner of Bishopsgate and Threadneedle Street to toast the fortunes of this well run small ships P&I Club now led by Charles Hume and to enjoy a surprising BBQ outside in the evening sun. A booklet produced by Ken Norman is given to the guests, which charts the history of the Shipowners Club from its parochial origins in the West of England to its present era of international success. The Club has 7322 members, 23 082 vessels and 10 258 837 gross tons entered. Its annual income is over $108 million.

The Club has got there by sticking to its knitting, using systems which can cope with this kind of volume, through the efforts of a specialist staff and a business style which errs on the side of underwriting and financial frugality. To this outside observer it is striking how often over the years this organisation has managed to sail around the shoals upon which a good many of the big ship Clubs have run.

http://www.shipownersclub.com/

5. White Night Riders Home and Safe

Nick Fairfax, Ron Pape and the band of other riders who crossed Russia from east to west on motorbike for Charity are home, not before some last minute harum scarum:-

On 06JUN In driving rain and poor road conditions, on Saturday morning , at the 6250 mile mark of their odyssey across Russia there was a freak accident.

An oncoming lorry, forced on to a very muddy shoulder, lost control, smashed into the car in front and careened across the road in the WNR lane where Rose Cecil was just passing. The lorry caught her pannier and spun both bike and rider to the ground while rolling onto its side, presenting an impassable wall to the riders behind. Somehow, Nicholas Von Preussen got around it in the opposing lane side, but Nick Fairfax's bike was smashed to bits. Fortunately he had gone down a nano-second beforehand and was thrown clear. Debris rained on the last two bikes, resulting in Ron Pape also going down and some minor damage to the last bike ridden by Kevin Saunders who remained upright. Miraculously the three riders downed were extensively muddied but
without injury.

The show must go on and by the Monday afternoon, after some very hard riding for two days which included all riders, the White Nights Ride rolled into Moscow late Monday afternoon, a little bruised but on schedule. The ride finished in St. Petersberg on 12JUN..

Read all about it at:-

http://www.whitenightsride.org.uk/index.html

6. And Finally...

The latest contribution to the Murphy wave comes from Paul Dixon's Joke of the Day

Murphy's Technology Laws

-->You can never tell which way the train went by looking at the track.

-->Logic is a systematic method of coming to the wrong conclusion with confidence.

-->Whenever a system becomes completely defined, some damn fool discovers something which either abolishes the system or expands it beyond recognition.

-->Technology is dominated by those who manage what they do not understand.

-->If builders built buildings the way programmers wrote programs, then the first woodpecker that came along would destroy civilization.

-->The opulence of the front office decor varies inversely with the fundamental solvency of the firm.

-->The attention span of a computer is only as long as it electrical cord.

-->An expert is one who knows more and more about less and less until he knows absolutely everything about nothing.

-->Tell a man there are 300 billion stars in the universe and he'll believe you. Tell him a bench has wet paint on it and he'll have to touch to be sure.

-->All great discoveries are made by mistake.

-->Always draw your curves, then plot your reading.

-->Nothing ever gets built on schedule or within budget.

-->All's well that ends.

-->A meeting is an event at which the minutes are kept and the hours are lost.

-->The first myth of management is that it exists.

-->A failure will not appear till a unit has passed final inspection.

-->New systems generate new problems.

-->To err is human, but to really foul things up requires a computer.

-->We don't know one millionth of one percent about anything.

-->Any given program, when running, is obsolete.

-->Any sufficiently advanced technology is indistinguishable from magic.

-->A computer makes as many mistakes in two seconds as 20 men working 20 years make.

-->The faster a computer is, the faster it will reach a crashed state.

-->Nothing motivates a man more than to see his boss putting in an honest day's work.

-->Some people manage by the book, even though they don't know who wrote the book or even what book.

-->The primary function of the design engineer is to make things difficult for the fabricator and impossible for the serviceman.

-->To spot the expert, pick the one who predicts the job will take the longest and cost the most.

-->After all is said and done, a hell of a lot more is said than done.

-->Any circuit design must contain at least one part which is obsolete, two parts which are unobtainable and three parts which are still under development.

-->A complex system that works is invariably found to have evolved from a simple system that works.

-->If mathematically you end up with the incorrect answer, try multiplying by the page number.

-->Computers are unreliable, but humans are even more unreliable. Any system which depends on human reliability is unreliable.

-->Give all orders verbally. Never write anything down that might go into a "Pearl Harbour File."

-->Under the most rigorously controlled conditions of pressure, temperature, volume, humidity, and other variables the organism will do as it damn well pleases.

-->If you can't understand it, it is intuitively obvious.

-->The more cordial the buyer's secretary, the greater the odds that the competition already has the order.

-->In designing any type of construction, no overall dimension can be totaled correctly after 4:30 p.m. on Friday. The correct total will become self-evident at 8:15 a.m. on Monday.

-->Fill what's empty. Empty what's full. And scratch where it itches.

-->All things are possible except skiing through a revolving door
.
-->The only perfect science is hind-sight.

-->Work smarder and not harder and be careful of yor speling.

-->If it's not in the computer, it doesn't exist.

-->If an experiment works, something has gone wrong.

-->When all else fails, read the instructions.

-->If there is a possibility of several things going wrong the one that will cause the most damage will be the one to go wrong.

-->Everything that goes up must come down.- Any instrument when dropped will roll into the least accessible corner .
Any simple theory will be worded in the most complicated way.

-->Build a system that even a fool can use and only a fool will want to use it.

-->The degree of technical competence is inversely proportional to the level of management.

-->Any attempt to print Murphy's laws will jam the printer.

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