BOW WAVE 436

Bow Wave Issue 436--Foglight Edition

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2008 WavyLine.com	Issue No 436 31 Mar 08
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. ICTSI's Portfolio
3. Paper Manuals into Data
4. AON P&I Report
5. LINE on Market Reform
6. And Finally...

1. Welcome

Poem of the Week

The Changing Light

The changing light

at San Francisco

is none of your East Coast light

none of your

pearly light of Paris

The light of San Francisco

is a sea light

an island light

And the light of fog

blanketing the hills

drifting in at night

through the Golden Gate

to lie on the city at dawn

And then the halcyon late mornings

after the fog burns off

and the sun paints white houses

with the sea light of Greece

with sharp clean shadows

making the town look like

it had just been painted

But the wind comes up at four o'clock

sweeping the hills

And then the veil of light of early evening

And then another scrim

when the new night fog

floats in

And in that vale of light

the city drifts

anchorless upon the ocean

Lawrence Ferlinghetti, from How to Paint Sunlight (2001)

New Readers this week include:-

Marine Manager Pieter Venter of Aon in Cape Town
Eugene Gogerman of SF lawyers Sterling and Clack Jim Mansfield of International Specialty inPennsylvania Dan McDonald of McDonald Marine Surveys in Canada

News of Readers

The new east coast US office of WE Cox will be headed up by Mr Charles "Charlie" Droll, who has been involved with the American marine insurance market for some twenty years, including time as President of the Recovery Forum, and as a member of the Maritime Law Association of the United States. He joins the W E Cox Claims Group from C N A Insurance where he was Director of Marine Claims and Recovery.

The London Conference of the International Institute of Marine Surveying will be held on 14-15APR08 on HQS Wellington. Click below for a brochure

http://www.iims.org.uk/news.asp?aID=70

Readers Write

From Jack Post in Rotterdam:-

Reading yours in Bow Wave Issue 436, in particular your reference to the Zen Hua 23 & 10 and the side remark that you cannot remember many of those crane delivery problems, I probably will sound like an old man telling you there were plenty !!!

There was a fabulous one involved one of the Members of Standard Club who delivered and 'landed' one alongside the quay on top of the existing crane. Very uncivilised behaviour by the local port authorities cost the Club millions. With the development/upgrading of ports in North Africa there have to my knowledge been at least two happenings where the crane carried as cargo hit the crane(s) still on the quay. In other words, certainly not a new phenomenon. There are also many stories to tell about some of the Black Sea ports where people have had the habit of ordering cranes which were too heavy for the quay, very slowly they slid away ...

It is not a common knowledge thing, probably because it is not in the regular insurance packages. It does make for nice pictures though, and we have from time to time enjoyed the handling of those claims.

jack@postvanophem.nl

(We stand corrected--ed)

Note from the Editor

Not too bad an edition, considering it comes out during the post Easter holiday season

Enjoy!

2. ICTSI's Portfolio

We regularly receive a copy of the Webzine of ICTSI, the terminal operating group based in Manila which has made quite a success of container stevedoring both at home and abroad. They report excellent growth and also on the present state of the ICTSI empire all over the globe.

http://www.ictsi.com/ictsi/uploads/File/portfolio/Intl%20Portfolio%20Mar%2008.pdf

3. Paper Manuals into Data

Our friends over at Digital Ship are running an interesting Conference on turning paper manuals into electronic data at the Shipdex conference in Hamburg on May 14th. For details go to:-

http://www.thedigitalship.com/conferences/shipdex/shipdex_about.shtml

4. AON P&I Report

Robert Belli of Aon has sent in a round up of the "least flexible P&I insurance renewal in memory."

Shipowners’ rates increased by 15.55% and Clubs obtained a record 96% of the originally advertised requirement of US$389 million. Against a backdrop of spiralling pool claims and an ‘absurdly’ late reinsurance tariff announcement, Aon is calling for full transparency in how individual owners’ premiums are allocated.

The Aon report is interesting for a number of reasons,not least the tone of voice which is much more assertive than used to be case for such publications. Also the level of detail at the individual owner level seems to us to be an advance upon previous years when Clubs would each issue a Soviet style successful renewal press release which tended to add up to 110 per cent of the world fleet.

As to the new volatility in claims, the Aon report has this to say:-

"This apparent imbalance is having a distorting affect on the individual owner. So much of the premium that an owner now pays is actually earmarked, not for the owner’s own record or even for his Club’s own retention claims, but rather, to pay for the costs of the Pool and Reinsurance. The acceptable loss ratio approach to an owner’s record (whereby the acceptability of an individual record is determined by the amount of net retained premium, after deduction of abatement (and/or specific reinsurance), pooling and reinsurance costs, against the net claims) is also becoming an anachronism. Again this is a theme we will return to but many owners now observe that less than 50% of their premium actually finds its way to support their own record, and in frequent cases (for owners with high retention and high reinsurance costs) the acceptable loss ratio may be considerably lower."

The use of the word anachronism in association with one of the entrenched underwriting ideas of the industry suggests that the industry is being reproached for complacency and arrogance (a foible to which the industry is sometimes prone). The brush fire of discontent spreading through the smaller sized end of the shipping market is hard to mistake in this year's list of winners and losers. Could it be that the current pork barrel era between Boards and Managers is overdue for revision?

robert.belli@aon.co.uk

5. LINE on Market Reform

Insurance market IT guru Roger Foord publishes a regular e-zine on the subject. His latest edition contains various items. Here is a smattering....

On Eliot Spitzer

I thought you might like my words about Eliot Spitzer from December 2004 in a published article:
‘Of course, when it comes to 2004 it is likely to be the Eliot Ness of our time, Eliot Spitzer, who has done much to put insurance into the public eye as a dubious group of brokers taking advantage of 'naïve' clients and underwriters. It might be OK for brokers such as Marsh to get a hefty kicking from some previously unknown civil servant in America, but he would be wise to realise the great involvement that the insurance community, particularly brokers in the US, made at the time of 11/9. Not just in staff lost but also in ensuring insurance policies were honoured and quickly. Ongoing the hurricane season in Mr Spitzer's country has been well served by the insurance market. Eliot, hopefully, has no skeletons in his cupboard and also doesn't have any hefty
insurance claims in the near future!’ The latter turned out to be nearer to the truth than I had thought.

On a Big Hub for the Lloyd's Market:

Interestingly the push for a strategic electronic trading platform at Lloyd’s appears to have gently disappeared. With Lloyd’s only looking to help by providing a single ‘hub’ for other’s solutions the expected ‘big bang’ is now a distant tremble. I could be wrong, and often I am, but what is proposed, apart from being a bit confusing in its message is purely a facility similar to a telephone company or water board. They supply the service and the user decides how and when to use it.
I imagine that the fear factor attaching to previous efforts and their resultant ridicule has given the new...ish Lloyd’s regime time to ponder on whether to take a ‘giant step’ or not. If not why not?

On Electronic Endorsements:

At the same time Willis’ are proposing an electronic endorsement system for London. I think that this has been previously proposed and now appears to be an emailed PDF of a formatted endorsement form. Good effort chaps but this is far from what should be happening, whereby the central bureau, XIS, need to get a handle on this issue before it is too late. This is what I said 16th August 2007 (Line 19) and nothing has changed, apart from the fact that nobody took any notice!
"An area which has become apparent with Market reform is the natural thoughts of having electronic endorsements. The general principal of such a system is the same as electronic claims whereby the bureau has the information on the original slip and also the underwriter lines attaching to the slip. Currently brokers are going at this individually but what is needed is a central system managed by the central bureau XIS. If the brokers go their own ways without this central function, underwriters will find their workload increased and agreement processes confused."
Also does the market really think that email is the best way forward for its future?

http://www.rogerfoord.com .

6. And Finally...

Thanks to Paul Dixon's Joke of the Day for these ones:-

Three Irishmen, Paddy, Sean and Shamus, were stumbling home late one night and found themselves on the road which led past the old graveyard.

"Come have a look over here", says Paddy, "It's Michael O'Grady's grave, God bless his soul, he lived to the ripe old age of 87."

"That's nothing", says Sean, "here's one named Patrick O'Toole. It says here that he was 95 when he died."

Just then, Shamus yells out, "But here's a fella that died when he was 145 years old!"

"What was his name?" asks Paddy.

Shamus lights a match to see what else is written on the stone marker, and exclaims, "Miles, from Dublin."

P.S.

As a drunk guy staggers out of the bar one Friday evening, a fire engine races past, siren wailing and lights flashing.

Immediately, the drunk starts chasing the engine, running as fast as he can until eventually he collapses, gasping for breath.

In a last act of desperation he shouts after the fire engine, "If that's the way you want it, you can keep your bloody ice cream!"

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