BOW WAVE 660

Bow Wave Issue 660--P&I Edition

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2013 WavyLine.com	Issue No 660 16 Jan 13
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. P&I Clubs--Pooling and Excess R/I Rates
3. Thomas Miller/UK Club on the Up?
4. Following Marine Markets Underwhelmed by IG Renewal Quote
5. How Not to...Board a Yacht
6. And Finally...

1. Welcome

Poem of the Week

Outside Fargo, North Dakota

Along the sprawled body of the derailed
Great Northern freight car,
I strike a match slowly and lift it slowly.
No wind.

Beyond town, three heavy white horses
Wade all the way to their shoulders
In a silo shadow.

Suddenly the freight car lurches.
The door slams back, a man with a flashlight
Calls me good evening.
I nod as I write good evening, lonely
And sick for home.

James Wright (1990)

New Readers this week include:-

Marine Risk Engineer Capt. Arjit Pall Singh of the Chub in Singapore
Grant Fugard of Marsh Marine Africa in Cape Town
Claims man Allwyn D'Souzaof Vero Marine in Sydney
Henri Garreta in France

News of Readers

The international bunker industry association (IBIA) has appointed Mustafa Muhtaroglu (Energy Petrol, Istanbul) as a new board member and re-elected Dilip Mody (Global Fuels & Lubricants, India) and Jens Maul Jorgensen (Oldendorff Carriers, Germany) to its board. Mustafa Muhtaroglu replaces immediate past chairman Bob Lintott.

FOB News

An interesting item came our way this week on the Dunbar number, a theory by an Oxford academic of the same name which says that the human brain copes well with around 100 to 150 close relationships. The example given is the sort of person you would feel comfortable joining for a drink after meeting them unexpectedly in a bar. Of course close relationships in domestic life and work life differ, work relationships occupying mostly some place on the spectrum between stranger and friend. We do not fret that the FOB Network builds slowly and the groups attract members according to the enthusiasms of the people in them. We feel comfortable with saying that the FOB Network contains people of whom you might have heard. It might be said that it was designed for the Dunbar number

Read the interesting piece on Dunbar numbers here:-

http://tinyurl.com/bzbead6

Registration is gratis for individuals. Businesses can take out a page for a small supporting contribution and we welcome firms prepared to sponsor Group pages or advertise with us. This helps to keep FOB a going concern and puts a smile on the face of our programmers and accountants..

FOB is a project designed to adapt the new ways of using the internet for the sorts of people who read Bow Wave.

You are welcome to join

http://www.fobnetworking.com

Note from the Editor

A lot this week on the world of the P&I Clubs, the industry where your editor spent many absorbing years.

An html version of this newsletter can be found by clicking on the link below

http://www.wavyline.com/current.php

Enjoy!

2. P&I Clubs--Pooling and Excess R/I Rates

RFIB, the P&I brokers have sent in a round up of the pooling and reinsurance rates surrounding the International Group of P&I Clubs. Readers can access the story and the schedules by going to the news page of our FOB Network at:-

http://www.fobnetworking.com

3. Thomas Miller/UK Club on the Up?

The broker reports say that one of the best placed P&I Clubs this tense renewal season is the UK Club and the word on the street tends to confirm. This return to form has been a long time coming. The boom years of the last decade saw an alarming decline of members as the organisation relied too much on the Steady as She Goes ideology and reflex conservatism of an earlier generation.

Signs also of late that the innovatory thread of life has been taken up once again. A news release just in describes the new underwriting application called iPandi available to members of the UK Club which takes account of the great mobility of individuals, new platforms and smart phones,the resources of smaller brokers and the need for the industry to reinvent itself for the future.

Some unkind comments have appeared in Lloyd's List but this is beside the point. Innovation in IT, telephony and communications is a long haul for medium sized financial organisations. To progress you need to be able to process and accept the mistakes, near misses and so-so results of introducing innovation at any one time. It is more like a slog than a series of illuminated light bulb moments.

Looking back, there have been innovations which, for one reason or another failed to ignite the world. We can think of the TT Xpress system aimed at the SME world of transport which was retired. The fullest blown assay was the venture into Bolero at the time of the internet bubble, a venture designed to redesign negotiable bills of lading in world trade and a cause which still has champions elsewhere like the ESS Docs venture founded by Alex Goulandris. We can also recall the Miller Encyclopedia, a meandering and wide ranging database lodged on Lotus Notes which might have been a rather grand industry asset by now with the greater availability of good search tools.

One thing seems sure--the solidity of P&I is something the world wants and needs, but the prize of surviving well and thriving will go to the Clubs which can make the most of the demands of the modern world and come up with solutions for a changing and at the moment rather broke shipping and transport world.

http://www.ukpandi.com/apps-social-media

Screenshots are available to download from:-

http://www.dunelmpr.co.uk/UKP&I-Photogallery-NEW.htm

4. Following Marine Markets Underwhelmed by IG Renewal Quote

Our good friends at the Insurance Insider have issued the following news:-

The 20 February renewal of the mammoth reinsurance programme for the International Group (IG) of protection and indemnity (P&I) clubs may be tortuous and difficult as support is solicited for the leader's renewal terms.

The IG reinsurance programme is one of the largest single reinsurance contracts in the world. It places $3bn of liability cover over four layers in excess of an individual and pooled club retention that has been increased from $60mn last year to $70mn for 2013.

Underwriters on the first layer have incurred losses of some $800mn in the past two policy years. This is largely due to the Rena and Costa Concordia losses, with P&I reserves of $325mn and $744mn respectively.

It is understood the placement of this key layer is structured as a deposit premium, which is then adjusted as member tonnage in the 13 clubs to pay for the additional reinsurance surcharge.

At the last renewal (see here) the initial terms for the layer were understood to include a deposit premium of $205mn, with original rating designed to produce a final premium of some $246mn. This did not take into account what is now the total $500mn loss due to the Costa Concordia.

As the renewal placement progressed, the Rena reserve suffered a first $50mn deterioration to $175mn, which necessitated a $40mn addition to the deposit premium to $245mn to complete the order.

It is understood the new 2013 terms for the layer are based on a deposit premium of some $275mn, with rating to earn a final estimated premium of $325mn.

Despite the major losses suffered by the layer the quoted increase in final rate terms is 32 percent, while the increase in upfront deposit premium is just 12 percent.

This layer is currently 75 percent-placed in the open market and is led by Catlin Group with a 15 percent line. The 2013 renewal proposes to decrease the open market placement of the layer to 70 percent.

However, The Insurance Insider understands that the underlying rating did not change. This means that the "additional" premium widely reported at the time was merely bringing forward cashflow that would have been due to underwriters at a later date.

Sources suggest that major marine reinsurer Hannover Re is now comfortable with Catlin's renewal terms, but that some significant following markets are yet to give their support to the deal.

The sources added that at this stage in the renewals process marketing would traditionally be well advanced, but that this year the slip has sported less support to the leader's terms than normal.

One underwriter expressed the hope that in this instance "the tail might wag the dog" in terms of holding out for more premium from the contentious renewal.

http://www.insuranceinsider.com

5. How Not to...Board a Yacht

Merci Frazer Hunt

http://youtu.be/zS3Xosgqp8g

6. And Finally...

Proud Maters as presented by Paul Dixon:-

Two mothers were talking about their sons.

The first said, "My son is such a saint. He works hard, doesn't smoke, and he hasn't so much as looked at a woman in over two years."

The other woman said, "Well, my son is a saint himself. Not only hasn't he not looked at a woman in over three years, but he hasn't touched a drop of liquor in all that time."

"My word," the first mother said. "You must be so proud."

I am," the second mother replied. "And when he's paroled next month, I'm going to throw him a big party."

The Cook

Every night, my wife calls me to dinner exactly the same way:

"Dinner's on the table -- come and guess it!"

My wife is kind of an old-fashioned cook. In fact, to this very day, she still makes radio dinners.

New Driver

Martin had just received his brand new drivers license.

The family troops out to the driveway, and climbs into the car, where he is going to take them for a ride for the first time.

Dad immediately heads for the back seat, directly behind the newly licensed driver.

"I'll bet you're back there to get a change of scenery after all those months of sitting in the front passenger seat teaching me how to drive," says the beaming boy to his father.

"Nope," comes dad's reply, "I'm gonna sit here and kick the back of your seat as you drive, just like you've been doing to me all these years!"

BOW WAVE is published each week to over 16 000 Readers in the transport,insurance,shipping and finance industries. It is free to Readers but you can support it as a going concern by subscribing as a business member to:-

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