BOW WAVE 463

Bow Wave Issue 463--Sourge of Piracy Edition

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Wavy Line	sam@wavyline.com
(c)2008 WavyLine.com	Issue No 463 06 Oct 08
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Quarterpoints
3. Piracy Round Up
4. Piracy Attacks
5. How to Build a Windfarm--One Day at a Time
6. And Finally...

1. Welcome

Poem of the Week

Silent Partner

The underwriter calls his bets--
Even a broker earns what he gets,
But who grows far while his brother sweats?
The lucky reinsurer.

No staff for him, no overhead--
Secure beneath the market's spread,
He reaps where other men have led,
The happy reinsurer.

But name the poor benighted clown
Who, when all the chips are down,
Has every lousy risk in town,
And who, when comes the fatal dawn
When faith is dead and hope is gone,
Must "pay as may be paid hereon"?
The poor old reinsurer.

James Quinby from The Street and The Sea (1971)

Thanks to Surveyor Larry Montgomery for passing a pdf copy of this book of poems along. Mr Quinby from the look of the poetry may well be the poet
laureate of the marine insurance classes. Does
anyone know more about him? (ed)

New Readers this week include:-

Timothy Elsworth in Singapore
Adam L Wallace of HSBC
Esther Tan of QBE in Singapore
Edward Bostelmann of Aon
Matthew Lewis of CNA
Jonathan Richards of the Maple Group
L Shepherd of Richards Butler HK
Capt Peter Burgess of the St.Lawrence Seaway Corp Bradleigh-Aaron McArthur of Willis
Mike Fountaine of Cooper Gay

News of Readers

Philip Webster, the Regional Underwriting Manager, Marine is transferring from Allianz in Sydney to Allianz in Singapore, starting on 20OCT08.

Contact him at:

philip.webster@allianz.com.au

Full Circle Diary

To Brown's we went in Shad Thames to attend the One Year Anniversay of Regis Mutual Management, the operation run by our joint venture partners Paul Koronka and Andrew Wallace. Regis runs a whole collection of non-marine mutuals, such as the Livery Company Mutual, the UK Newsagents' Mutual, The Activity Industry Mutual, the Australian Universities Mutual and Capricon, the Australian Motor Trader's Mutual, to name but a few. Koronka will be known to many Readers from his days in the West of England P&I Club and Wallace has a long career behind him in risk management consultancy at Charles Taylor. They have attracted a singular collection of talents to their business, people who on first meeting seem on the whole content to have left the environment of more traditional organisations. For the mutual insurance industry, which over recent years has acquired a grey and listless look in its current marine homes, some timely new blood.

Full Circle Marine and Transport has opened for
business and is busy with a volume of enquiries which can only be described as welcome. There appears to be some turbulence in the market with AIG's sudden fall from grace and and as one or two other providers in the market get to grips with the legacy of their pricing and underwriting policies in years past. There is perhaps even a suggestion abroad that the market is hardening!

http://www.fullcircleuw.com

Note from the Editor

This edition sees the introduction of a short diary piece reflecting the progress of our new venture Full Circle MAT. We will use it to give some idea of what it is like starting up an operation like this and also with a view to explaining our aims and approach. We will put our own agenda items here and keep the rest of the zine for the wider market picture. At the very beginning, back in the naive days of late 1999, we started Bow Wave in the expectation that it would be a handy way of furthering an online approach to marine insurance. In its own peculiar way it has served some sort of purpose like this, but the IT tools we use in marine insurance mark a strong industry preference for peer to peer contact.

Some pieces also follow charting the scourge of piracy.

Enjoy!

2. Quarterpoints

Your editor's most recent column for Lloyd's List is a onceover of where the turmoil in the financial markets leaves us marine insurance hacks.....

Where to Keep the Cash

Let’s say you are a Club Manager or Coverholder or Managing General Agent and you hold quite a few millions in funds. This late September morning, how do you go about deciding where you should keep it? Probably stocks and shares are not such a great idea, nor would any property related acquisitions be much of a starter. A prudent investment manager would probably think in terms of government bonds or near cash of some sort. A new feature for this sort of manager has emerged in 2008. He or she needs to think quite hard about which bank or building society might be a sensible place to put funds. Many banks have become places which fund and shareholders must regard with anxiety and even fear.

The financial turmoil of this year has attacked the one o f great assumptions of civilised societies, that money is a store of value which can be used to navigate and measure many of the transactions of our lives. The AIG has become a federal ward with fearsome rumours circulating about the scale of the capital gap which did for this AAA-rated behemoth. What is the value of money when a 700 billion dollar rescue package can be described as a possibly inadequate stop-gap measure? I can remember as a teenager the trouble I had understanding how much 1000 billion, a trillion, amounted to. This was the gdp figure for the US economy some 30 years ago.

These times are our own seat on the balcony of history observing the swings of emotion, the culminations of fear and greed, the popular delusions of people and organisations experiencing the bursting of a big bubble. The cast of characters is thrilling--the villainous investment bankers who grew so fat in the years of the bubble, the ineffectual government regulators, the hapless rating agencies, the vengeful politicians trying to pick up the pieces. The legions of the prosperous enjoying a balmy decade of low consumer prices and rising stock and property prices slow to recognise that the world they have enjoyed is effectively gone. The globalisation of markets has found an end at the door of national treasury ministers acting in their capacity of bankers of last resort.

Going forward from these tumultuous times will surely require us to find and acclaim values that are of greater worth than the soap coupons underpinning the financial system this autumn. Most of us in the insurance world are financial slow coaches, cautious with funds, unadventurous investors aiming to preserve money. It is difficult to say how the industry will weather the storm. What faith will the world’s claimants have in the promises of a bank guarantee, given to free a ship from arrest? This used to be thought by some claimants to be of more worth than a mere letter of guarantee provided by a P&I Club. For those of us in the marine insurance world, we grope towards the consolation that we are not dealers in the arcane black arts of financial traders, but subcontractors to the world’s real economy helping to protect the many risks of transport, ships and cargo. The end users are the citizens in Main Street, all over the globe, often the same citizens who have bought into the notion that property prices inevitably increase and the goodies of the earth are available at really low prices, no down payment required.

I have wondered for at least ten years how our societies can continue when so little production and manufacturing is located within our midst. I have never entirely understood the notion of derivatives in general or securitised debt in particular, nor how long term prosperity can be built on the efforts of a small population of highly specialised traders in financial products. Can we really live on ideas, notions, systems, software, fashion, media, financial services and so on? Further and further away from the factory and the farm? Is this thin air our common economic destiny?

3. Piracy Round Up

The following item appears in the latest edition of Anderimar News, the e-zine issued by shipping journalist David Hughes, whom we have known since your editor's regional days in Hong Kong.

Seafarers' champion detained

WELL known Mombasa-based seafarers' champion and anti-piracy worker Andrew Mwangura has been arrested and has been ordered by a magistrate to be detained for five days of interrogation. According to Kenyan news reports Mr Mwangura has been charged with issuing alarming statements and being in possession of four cannabis joints.

The action apparently stems from Mr Mwangura's remarks that he believed military hardware on ro-ro Faina, hijacked off Somalia on passage to Mombasa, was destined for Southern Sudan rather than the Kenyan army as the Kenyan government is insisting.

Meanwhile the UN Security Council is next week expected to consider a resolution proposed by France calling on all countries with a stake in maritime safety to send military ships and aircraft to fight piracy off the coast of Somalia.

The Associated Press says it has seen a draft of the resolution which would also call on ships and planes to use "the necessary means" to stop acts of piracy.

The Singapore Shipping Association (SSA) has added its voice of concern at the situation off Somalia. On Tuesday SSA hosted a forum where a panel of speakers comprising the Officer in Charge of the UK Maritime Trade Operations (UKMTO) based in the Middle East, the United States Assistant Naval attache at the US Embassy in Singapore and Vice Admiral of the visiting French Navy Ship Var updated SSA members on the piracy and maritime security situation in the Gulf of Aden. Representatives from the Maritime and Port sectors also attended

SSA President, Mr S. S. Teo said, "There is an urgent need for the international community, especially through the International Maritime Organisation and the United Nations to find ways to deploy the required level of military effort needed to re-establish stability in the Gulf
of Aden."

He added, "Apart from the serious threat to the lives of seafarers, including citizens of those nations represented by the Coalition, one should also be aware that the Gulf of Aden is at the centre to one of the world’s most strategically important international waterways."

Mr Teo also said, "Whilst there have been no hijacks on Singapore-flagged vessels to date, the global nature of the shipping industry means that we simply cannot stand by and do nothing. We understand the constraints and difficulties faced by the Coalition naval forces currently operating in the Indian Ocean and Gulf of Aden, and hope that their governments will work together to come up with a stronger, more effective response to tackle the problem of piracy in the Gulf of Aden."

Contact David at:-

david@anderimar.eclipse.co.uk

4. Piracy Attacks

Maria Dixon writes from Panama:-

I have received the special analysis I am copying below on the Piracy in the Gulf of Aden:-

ONI SPECIAL PIRACY ANALYSIS: GULF OF ADEN

The volume of recent Gulf of Aden piracy has allowed the Office of Naval Intelligence (ONI) to determine factors that represent maximum risk of becoming a hijack victim. Of these, vessel speed at time of attack and time of day are the most significant. Analysis over a two month reporting period included 21 incidents representing both firing incidents and vessel seizure. Suspicious approach incidents that did not involve gunfire were not used in this risk quantification process.

All but one hijacking occurred during daylight hours. The single exception took place at 0430 local time during a period of 94% lunar illumination. The average service speed of the 10 vessels that were fired upon but not boarded was 15 knots. The average service speed of the 11 vessels that were successfully boarded by pirates was 14 knots.

Attacks over the study period occurred in clusters east of longitude 046 degrees 38 minutes east and west of longitude 050 degrees 32 minutes east. Attack activity within these boundaries is likely due to a combination of factors that impact small boat operations such as currents, prevailing winds, sea state, and distance from pirate staging areas.

In addition to increasing standard anti-piracy precautions, all vessels are advised to proceed through the entire Gulf of Aden at maximum possible speed. Vessels with characteristics that put them at higher risk, like maximum speeds of 15 knots or less, as well as those with low freeboard, are advised to minimize risk by transiting as much as possible of the eastern Gulf of Aden in hours of darkness.

Contact Maria at:-

ismshipping@gmail.com

5. How to Build a Windfarm--One Day at a Time

Walter Hansel of the Californian firm of Cooper, White & Cooper has sent in a copy of his firm's most recent Memo to Clients, which contains a demonstration of how to erect giant windpower turbines and towers in a single day:-

http://www.vertikal.net/en/stories.php?id=5116

6. And Finally...

This awful joke appears in the latest edition of Paul Dixon's Joke of the Day zine:-

A woman stopped by unannounced at her recently married son's house. She rang the doorbell and walked in. She was shocked to see her daughter-in-law lying on the couch, totally naked. Soft music was playing; the aroma of perfume filled the room. "What are you doing?" she asked.

"I'm waiting for my husband to come home from work," the daughter-in-law answered.

"But you're naked!" the mother-in-law exclaimed.

"This is my love dress," the daughter-in-law explained. "Love dress? But you're naked!"

"My husband loves me to wear this dress," she explained. "It excites him to no end. Every time he sees me in this dress, he instantly becomes romantic and ravages me for hours on end. He can't get enough of me."

The mother-in-law left. When she got home, she undressed, showered, put on her best perfume, dimmed the lights, put on a romantic CD and laid on the couch waiting for her husband to arrive. Finally, her husband came home. He walked in and saw her lying there so provocatively.

"What are you doing?" he asked.

"This is my love dress" she whispered, sensually.

"Needs ironing," he said.

Toahoogroups.com

P.S.

One from Jon Chaplin of Tradewinds which, names apart, has some considerable vintage...

The All Blacks were playing England, and after the half-time whistle blew they found themselves 50-0 ahead, Jonah Lom u scoring eight tries. The rest of the team decided to head for the pub instead of playing the second half, leaving Jonah to go out on his own. 'No worries,' said Jonah, 'I'll join you later and tell you what happened.'

After the game Jonah headed for the pub where he told his team-mates the final score: 95-3. 'What!' said a furious Michael Jones. 'How did you let them get three points?'

Jonah replied apologetically: 'I was sent off with 20 minutes to go.'

P.P.S.

Actual excerpts from British university student exams, as collected by the London Telegraph newspaper.

Northern Rock's downfall can be attributed to the "laxative enforcement policies".
--Economics student at City University in London

"The Handmaid's Tale shows how patriarchy treats
women as escape goats."
--Student at Bath Spa University

"Tackling climate change will require an
unpresidented response."
--University of Southampton student

"Nirvana cannot be described because there are no words in existence for doing so. Not non-existence either, it is beyond the very ideas of existing
and not existing."
--Student St Helens College of Art and Design, who were asked to "outline the importance of the four Noble Truths to the Buddhist faith".

"Control of infectious diseases is very important in case an academic breaks out."
--University of Southampton student

"The railways were invented to bring the Irish from Dublin to Liverpool where they were promptly arrested for being vagrants." and "The railways were invented o take the weight off the motorways."

--Answers from two students at the St Helens College of Art and Design when asked to discuss the importance of railways in 19th-century Britain.

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