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Bow Wave Issue 360--Agreeable Social Edition

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Wavy Line	sam@wavyline.com
(c)2006 WavyLine.com	Issue No 360 16 Oct 06
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Thoughts on Legacy
3. Turns of Phrase: Aerotropolis
4. The West of England Club
5. Progress Report on Lloyd's CEO
6. And Finally...

1. Welcome

Poem of the Week

Proverbial Ballade

Fine words won't turn the icing pink;
A wild rose has no employees;
Who boils his socks will make them shrink;
Who catches cold is sure to sneeze.
Who has two legs must wash his knees;
Who breaks the egg will find the yolk;
Who locks his door will need his keys--
So say I and so say the folk.

You can't shave with a tiddlywinks,
Nor make red wine from garden peas,
Nor show a blindworm how to blink,
Nor teach an old raccoon Chinese.
The juiciest orange feels the squeeze;
Who spends his portion will be broke;
Who has no milk can make no cheese--
So say I and so say the folk.

He makes no blot who has no ink,
Nor gathers honey who keeps no bees.
The ship that does not float will sink;
Who'd travel far must cross the seas.
Lone wolves are seldom seen in threes;
A conker ne'er becomes an oak;
Rome wasn't built by chimpanzees--
So say I and so say the folk.

Envoi

Dear friends! If adages like these
Should seem banal, or just a joke,
Remember fish don't grow on trees--
So say I and so say the folk.

Wendy Cope from Making Cocoa for Kingsley Amis

New Readers this week include:-

Kathy Pu of Asian Insurance Brokers in Shanghai
Martin May
Mark Banks of Insurance Workplace
John Hopkins

News of Readers

Jeff Blum has sent in details of a forthcoming event hosted by the London Branch of the Chartered Institute of Ship- brokers. Officials from Intertanko will present on the Poseidon Challenge and Mr Roger Holt of Intercargo will speak on Current Problems of Ship Management.

The event is at 17:30 on 25OCT06 at the St Gregory Hotel 100 Shoreditch High Street.

For further details contact:-

ics@icslondon.org.uk

Ole B. Stene, Managing Director of Manila-based Aboitiz Jebsens, has been appointed as the new President of the International Ship Managers’ Association (InterManager)

Readers Write

From Mr Bevis Marks

There has been much in the news this week about the highly innovative use of subordinated debt in the financial arrangements of the TT Club. Would this be the same sort of thing done in Hong Kong in the highly innovative year of 1994 to satisfy the solvency requirements of the Hong Kong Insurance Regulator? May be we should be told.

http://www.ttclub.com

AfterOfficeHours News

he latest edition of the Maritime Advocate online (Issue 274) can be accessed by clicking on the link below.

http://afterofficehours.com/news.php

Readers who would like to subscribe to this highly readable fraternal publication--which is edited by Chris Hewer and published free to Readers--should send an e-mail to:-

contactus@afterofficehours.com

The Maritime Advocate online archive

The publishers are proposing to create an archive for the Maritime Advocate which will provide an opportunity for a number of firms to demonstrate their expertise to our readership.

In addition to the back editions of the Maritime Advocate itself, there will be two central aspects to the archive:

1. To provide regular case-law updates on transport and insurance law from their particular jusirdiction. It is expected that a wide range of jurisdictions will form part of the case-note database.

2. To provide an overview of the transport law in each jurisdiction. An example of this which has overview which has already been prepared for India by BJ Macfarlane & Co can be supplied..

Each jurisdiction will only be represented by two sponsoring law firms. One will provide the case law updates. The other will provide the country summary. If you or your firm is interested in supplying these materials please contact the publishers at:

contactus@afterofficehours.com

Note from the Editor

A busy week for your editor, out and about attending agreeable socials and surveying greenish pastures new.

Enjoy!

2. Thoughts on Legacy

It was at the 10th Anniversary Party for the Insurance Insider that your editor was addressed by a former senior broker from one of the largest alphabet houses. He asked a rhetorical/forensical question or two.

e.g.

Which leading broking house had decided to apply its increased budget allowances not to business development but to tackling the legacy issues which have built up over the last 15 years?

And which of the largest broking houses has a backlog of over 350 000 unissued policies to deal with?

Just as this year grey is the new black in ladies fashion, it seems for the UK insurance regulator the old frock called Contract Certainty is being accessorised by a new and entirely un-expected emphasis on the clearing up of Legacy Issues.

This will come as a great relief to people awaiting the settlement of fees and payments under cover slips arranged by insurance brokers and their helpers of yesteryear who hjave flown the coup after the many mergers and
acquisitions as time when by.

Indeed my source tells me that the ranks of taxi drivers and other provisional occupations in London Town are being thinned as out-of-work functionaries from the insurance intermediaries are called back to arms to help unravel the ravages that time has wrought on the occupation of broker since the early 1990s. Strange to think the tide is rising for 50something wording technicians in our times.

3. Turns of Phrase: Aerotropolis

From World Wide Words, the e-zine published
by OED contributer Michael Quinion:

"When this first appeared, from the mind of Professor John Kasarda of the University of North Carolina in 2000, it looked like one of those words whose life would be short and its death unmourned. But it shows signs of achieving some permanence in the vocabulary of aviation, economics, and urban planning.

The idea behind the term is that major hubs of air transport are now associated with levels of economic importance that were once the preserve of major seaports. The jobs directly generated by the airport are obviously significant; much more financially important, however, are the firms that relocate near the hub to take advantage of the speed with which passengers and high-value cargo can be flown all over the world.

In several places, new airports are being created explicitly to exploit this, for example the new Suvarnabhumi International Airport in Thailand and the Dubai World Central airport.

The term is a combination of "aero-", in its aircraft sense, with "metropolis". There's some doubt in writers' minds what the plural should be; both "aerotropolises" and "aerotropoli" have appeared.

* Detroit Free Press, 14 Apr. 2006: A vast assemblage of logistics firms, warehouses, industrial production and other businesses that rely on rapid air delivery, the aerotropolis has been a shimmering vision since county officials proposed it several years ago.

* Cosmetics International, 8 Sep. 2006: Amsterdam's Schiphol Airport is a prime example of an aerotropolis according to Euromonitor. Around 58,000 people are daily employed at the airport itself, and the surrounding business district stretches for 15 miles and includes the regional head quarters of such firms as Unilever."

4. The West of England Club

The recent P&I Confidential Report issued by brokers AJ Gallaher has this to say about the WOE

"The West of England results were released some months ago, with a small overall operating loss of $ 1.8 million being revealed. They have now announced 15% excess calls on all three open years 2004-05 to 2006-07. They euphemistically describe this process with the phrase "the original 15% release call shall be called as a 15% additional call". No-one should confuse the two expressions -- this is an excess call: a fact further reinforced by the fact that new release calls have been set following these excess calls.

The club go on to advise that a further $ 55 million will be required over the next few years in order to complete the refinancing the Club. It would seem from the circular that this financing will be levied on the 2006-07 membership, for up to a further 35% of advance call. This may however not be called -- depending on the profitability of subsequent policy years. In effect, the results of future policy years can impact the call level of the current year -- an unusual situation and one which could lead to disputes, should those future years experience extreme results.

The need for the excess call is said to be to better position the Club for the forthcoming enhanced solvency requirements to be imposed by the EU in or around 2010 -- the so called "Solvency 2" requirements. They estimate a further $ 130 million of free capital will be required under these, as yet fledgling, requirements.

Whilst it is undoubtedly true that "Solvency 2" requirements will considerably increase West’s solvency requirements, the explanation fails to mention another significant reason for the need for more funds - such funds have not been generated internally, as would appear to have happened at other Clubs. The Club has comparatively underperformed when compared to the rest of the
International Group in aggregate since the turn of the century.

Since 2000-01, West of England’s Free Reserves have fallen by 14.63% as compared to an increase of 43.84% seen in the rest of the Group combined. The aggregate overall result since that date had been a loss of $ 22.7 million at West, compared to a surplus of $ 596.5 million seen in the other Clubs combined. This disappointing result has been largely down to underwriting losses, as investment income has stood up well -- in fact it has exceeded the average group result in many years."

For further reading contact:-

Bernard_Cook@ajg.com

5. Progress Report on Lloyd's CEO

From the current issue of Roger Foord's zine Line 10

Richard Ward, the new Lloyd’s CEO, made his first major speech to the CII conference in Glasgow last week.

His words were very pro London as ‘the market place of choice’. There were, he said, four challenges to London:

-->The fall out from Spitzer in New York
-->Regulation and the FSA requirements of London
-->Competition
-->The void left by Kinnect’s failure

From other comments made about the new CEO it sounds as if he is well aware that the workings and expertise of the London market are globally exceptional an that his aim is initially to provide London and therefore clients with more efficient business processes for placements, claims and accounting/settlement.

At least it doesn’t seem that he is rushing in with a new ‘technology broom’ as had been thought might be the case with his recent history. If he can get the Lloyd’s market to 100% embrace electronic claims and does not think that Kinnect was anything more than ‘Nick Prettejohn’s Folly’. It would also seem productive for the London market if he could ensure that any work to improve London’s business processes is inclusive of both Lloyd’s underwriters and company underwriters.

Interestingly Mr Ward didn’t mention initiatives such as G6, where there are rumours that usage is nothing like expectations. Is this another Kinnect? Does the 6 actually mean, after twelve months, six transactions?

To subscribe to Line 10:-

www.rogerfoord.com

6. And Finally...

Thank's to Paul Dixon's Joke of the Day Zine for these:-

Cards for the "Not So Perfect" Relationship

You were meant for me, perhaps as a punishment.

I know how to push all my wife's buttons ... now if I could only find the one marked OFF!

I must admit, you brought religion in my life. I never believed in hell until I met you.

Looking back over the years that we've been together, I can't help but wonder: what was I thinking?

As the days go by, I think of how lucky I am that you're not here to ruin it for me.

They say that an attractive human body is worth a million dollars. Looks like someone robbed you.

When we were together, you always said you'd die for me. Now that we've broke up, I think it's time you kept your promise.

I knew the day would come when you would leave me for my best friend.

So here's his leash, water bowl and chew toys.

I'm so miserable without you, it's almost like you're here.

P.S. Frazer Hunt

Jim: "I'm a man of few words."

Bill: "Yeah, I'm married, too."

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