BOW WAVE 305

Bow Wave Issue 305--Bow Tie Edition

news and views on trade, insurance and risk

Bow Wave homepage
Previous issue (304) / Current issue / Next issue (306)

Wavy Line	sam@wavyline.com
(c)2005 WavyLine.com	Issue No 305 26 Sep 05
Published free of charge to Readers
Editor: Sam Ignarski
Subscribe	Unsubscribe

In this issue:

1. Welcome
2. Letter from IUMI Amsterdam
3. Seminar to Highlight Tonnage Tax Opportunities
4. Hurricane Rita--Early Reporting
5. Signage at the North of England
6. And Finally...

1. Welcome

Poem of the Week

Black Umbrellas

On a rainy day in Seattle stumble into any coffee shop and look wounded by the rain.
Say Last time I was in I left my black umbrella here. A waitress in a blue beret will pull a black umbrella from behind the counter and surrender it to you
like a sword at your knighting.
Unlike New Englanders, she'll never ask you
to describe it, never ask what day you came in,
she's intimate with rain and its appointments.
Look positively reunited with this black umbrella and proceed to Belltown and Pike Place.
Sip cappuccino at the Cowgirl Luncheonette on First Ave. Visit Buster selling tin salmon silhouettes
undulant in the wind, nosing ever into the oncoming, meandering watery worlds, like you and the black umbrella, the one you will lose on purpose at the day's end so you can go the way you came
into the world, wet looking.

Rick Agran, from Crow Milk

New Readers this week include:

Chris Van Heerden of Wachovia
Igor Sokolov of Falcon in Saint Petersburg
Christopher Bland of Hovertravel on the IoW
Dddie Li and Jesslyn Goh of Eng Kong
Matthew Nolan and Vania Gava of Marsh
Vincent Cousquer of the Helvetia in France
Ling Zhu of Lloyds Register

News of Readers

Stuart Hetherington will shortly be joining Colin Biggers and Paisley in Sydney as a Partner.

contact him at:

swh@cbp.com.au

This week saw your editor in bow tie mode chairing a stimulating seminar on P&I. Outside the well ordered calm of the Conferences Suite of Lloyd's Maritime Academy in Paul Street, the marine insurance market is coming to terms with the cost of this year's highly destructive hurricane season. 1000 per cent loss ratios do help concentrate the mind....

Enjoy.

2. Letter from IUMI Amsterdam

Walter Mellert writes:-

Dear Mariners,

As usual, I would like to share with you those unofficial quotes and bon-mots that quite often reflect the spirit of a meeting more accurately than all the super-serious stuff that is published (IUMI stands for the International Union of Marine Insurance--ed).

-->Any signs of a softening market are now gone with THE wind. (could be that desire overruled experience)
-->A $ 10 per bbl rise in oil prices costs nearly 5% in global growth...now let's see, from $ 40 to 70, that's. ...recession?

-->Offshore energy 1986 to 2004 produced a 25% negative return on equity. Capital quo vadis?.

-->With insured offshore losses for Katrina and Ivan estimated at $ 3 to 5.5 bio and 2.7 bio respectively resulting in a 5 yr incurred ratio of 300% or nearly 1000% for the last 2 years, fundamental market changes are required to get things straight.

-->If vetting of chartered tankers is such a priority with oil majors, the question remains: Why don't they own them more often?

-->If marine insurance is so essential, why aren't they (the clients) more willing to pay for it? Met a poor shipowner recently?

-->Average clearing of cargo from port takes approximately 20 days. How about proper pricing for NatCat exposure?
-->Moisture content in rye/wheat is about 13- 15%, above that, particularly in combination with increasing ambient temperature, problems start.

-->OPEC surplus production capability is nearly exhausted, new discoveries are few and far between, China's import demand has more than doubled in the last 10 yrs and your SUV isn't running on sugarwater either. A bbl price of $ 100 by 2010 is not entirely unrealistic.

-->Newer building yards have an alarming lack of know-how; combine this with a serious work overload and start worrying.
-->Repair prices in terms of $ per kg of steel replaced have decreased from $ 7 to about $ 4 in the last 35 years yet the price of steel plate has gone up from $ 180 to $ 400. Could it be that quality has paid for the difference?

-->It's not the statistical base that is missing to put hull pricing right,it's the lack of underwriter savvy and possibly determination.

-->Crew quality, aggravated by an increasingly unattractive image of a merchant marine career scaring off bright new cadets will soon show some adverse effects on claims.
-->Katrina at 150 mph was not the worst, Camille in 1969 had sustained wind speeds of 190 mph with gusts up to 220 mph

-->The airgap on most GoM platforms may be woefully insufficient - Ivan apparently had quite a few waves exceeding that golden standard of 50 ft, with the max measured a gigantic 95 ft.

-->And now Rita is heading for the Gulf, but at least, salvage values of damaged rigs should be quite good, so we hear.

-->Guaranteed outturn covers are a difficult subject, combine them with the maze of uncontrolled and highly intransparent (insured) stock keeping the whole thing can quickly turn into a nightmare. Lesson learnt: Check inventories!

-->Want to buy a reefer box? $ 16'000 will get you a TEU, $ 19'500 a FTU Might be a good idea as the reefer vessel fleet is getting quite thin and old.
-->Writing refrigerated cargo without proper know-how is nothing short of gambling, with rather high stakes!
-->Yearning for a transparent, custom tailored non-prop reinsurance quote? Supplying really detailed information will eventually get you there.

-->Human error is the root cause of 54% of all P&I claims triggering 62% of the total claims payments. To re-quote Mark Twain: Man is the creature God created at the end

Now let's see whether we can follow up on all these good intentions and insights with appropriate deeds.

Best regards from Amsterdam
Walter

Any opinion expressed in this item should be regarded as the personal opinion of Walter Mellert and not one made in his capacity as an employee of Swiss Re and any such opinion is not the opinion of Swiss Re, of any of its affiliated companies or of any of its officers or employees.Accordingly, Swiss Re hereby expressly disclaims any liability, loss, cost or expenses arising directly or indirectly from the content or expression of views of this newsletter or of other websites to which this newsletter may provide a link.

3. Seminar to Highlight Tonnage Tax Opportunities

Chris Hewer writes:-

Recent changes to the UK Tonnage Tax regime, and recent guidance on leasing, have created new opportunities for shipowners to benefit from using the regime. Leading shipping accountant Moore Stephens is to host a seminar to highlight these changes and opportunities.

The seminar will cover recent EU state aid guidelines, flagging requirements, the election window and vessel types. Expert speakers from Moore Stephens and the industry will explain the benefits of tonnage tax entry, the training requirement and give an update on the employment link. Finally, Philip Parr, Moore Stephen's shipping tax expert, will discuss advance clearance, bareboat and time charter in tonnage tax, leasing, hedging and freight taxes.

The seminar will take place on Thursday 20 October 2005 between 4.00pm - 6.00pm at The Salters' Company, Salters' Hall, 4 Fore Street, London EC2Y 5DE

To reserve a place at the seminar send an e-mail to:-

chris@merlinco.com

4. Hurricane Rita--Early Reporting

For early summaries of transport and insurance related casualties and disruption, Readers are well advised to look out for AllCoveredNews, a weekly e-zine which is produced in Fort Valley, Georgia by cargo and freight insurer Mike Miller who did a good job also on Katrina and after. Early reports already suggest that the damage of Rita has been less striking .The link below gives access to current and past editions in pdf format:-

http://www.allcovered.net/AC-News-PDF.htm

5. Signage at the North of England

What in these busy days full of paperwork, audits and written procedures can a P&I Club to bring its message to the men who work on an entered ship? Well according to Andrew Kirkham, one of the new wave in the loss prevention side of the North Of England P&I Club at the International P&I Seminar held the past week in London, you try and summarize the thing using a good visual.

A few examples of this approach can be seen at the Club's website:-

http://www.nepia.com/risk/publications/posters/mast.php

6. And Finally...

This contribution from Dave Letteney looks bound to produce emulators in other places in the world......

YOU KNOW YOU'RE FROM MASSACHUSETTS WHEN.....

1. You think crosswalks are for wimps.
2. You think if someone's nice to you they either want something or they are from out of town and lost. 3. You know how to cross four lanes of traffic in five seconds. 4. You think it's not actually tailgating unless you're touching the bumper of the car in front of you. 5. You know that a yellow light means that at least five more people can get through and a red one means two more can.
6. The transportation system is known as the "T". 7. You could own a small town in Iowa for the cost of your house.
8. Subway is a fast food place.
9. There are 24 Dunkin Donuts shops within 15 minutes of your house.
10.When people talk about "The Curse Of The Bambino" you know what they're talking about and believe it too. 11.You believe using your turn signals gives away your plan to the enemy.
12.If you stay on the same road long enough, it eventually has three different names.
13.Someone has honked at you because you didn't peel out the second the light turned green.
14.You have honked at someone because they didn't peel out the second the light turned green.
15.All the potholes just add to the excitement of driving. 16.Stop signs mean slow down a little, but only if you want to. 17.Six inches of snow is considered a dusting.
18.Three days of 90 degree heat is definitely a "heat wave"; 63 degrees is "on the warm side"
19.You cringe every time you hear some actor/actress imitate the "Boston Accent" on TV or in a movie; if you don't have it, then you're never going to get it even if you were born here.
20.At the ice cream shop you call chocolate sprinkles "jimmies".
21.You can go from one side of town to the other in less than fifteen minutes and see at least fifteen losers you went to high school with doing the same thing they were doing when you saw them last. 22.The person in front of you is going 70 MPH and you're cursing them for going too slow.
23.You know how to pronounce towns like Worcester, Haverhill, and Cotuit.
24.You know what they sell at a "packie".
25.You have never been to Cheers.
26.You've slammed on your brakes to deter a tailgater. 27.You still try to order curly fries from Burger King. 28.You keep an ice scraper in your car all year round. 29.You know at least three Tony's, one Vinnie, and a Frank. 30.Paranoia sets in when you can't see an ATM or CVS. 31.You've pulled out of a side street and used your car to block oncoming traffic so you can make a left. 32.You've bragged about saving money at The Christmas Tree Shop. 33.You know what "regular coffee" is.
34.You can navigate a rotary without a problem.
35.You have been to Fenway Park.
36.You refer to the New York Yankees as the devil. 37.You feel the rest of the world needs to drive more like you. 38.When someone calls you a "masshole" you take it as a compliment.
39.You use the words "wicked" and "good" in the same sentence. 40.You know what a frappe is.
41.Saint Patrick's Day is your second favorite holiday. 42.You are proud to drink Sam Adams and think the rest of the country owes Bostonians a thank-you.
43.You never say "Cape Cod" you say "the Cape".
44.You went to Old Sturbridge Village and Plymouth Plantation in elementary school.
45.You can drive to the mountains and the ocean all in one day. 46.You have a special place in your heart for the Worcester Firefighters.
47.You know that 128/95 is some strange weather dividing line. 48.You almost feel disappointed when someone doesn't flip you off when you cut them off or steal their parking space. 49.You actually get all the jokes and pass them on!

BOW WAVE is published each week to over 12 500 Readers in the transport,insurance,shipping and finance industries.

Thanks for reading BOW WAVE