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Bow Wave Issue 668--Beware the Hydra Edition

news and views on trade, insurance and risk

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(c)2013 Issue No 668 16 Apr 13
Published free of charge to Readers
Editor: Sam Ignarski

In this issue:

1. Welcome
2. Beware the Shipping Hydra
3. Whatever happened to Ri3k?
4. Greenwich Maritime Institute
5. India Approves two Iranian P&I Underwriters
6. And Finally...

1. Welcome

Poem of the Week

Lower Away!

A steamer in sight.
Make starboard boat ready!
Are the plugs in her, tight?
Are the hands awake, Freddy?

Keep steaming towards her
And aim for her bow.
We’ll close in ten minutes.
Just steady her, now.

Get the hands upon deck.
Blow "Punt-ho!" -- Three whistles!
Make all double-check.
All sparkles. All bristles.

Then slide alongside
At a half-cable off,
And smoothly, with pride,
No falter. No cough.

Now "Lower away!"
To the water she goes.
Both tackles belay!
The pilot, he knows.

He jumps in, accordingly,
Trusting the hands,
Who are watching, affordingly,
Minding their hands,

And waiting their turn
Until they’re pilots, too.
How much did we learn
As we served in the crew?

Barrie Youde (12th January 2013)

New Readers this week include:-

Darryl Ashbourne of KPMG
Daniel Pincirolli of the Zurich
Johanah Lewis of Gateleys
Colin Hamling of Crossrail

FOB News

The latest group to be started is Dalian Maritime University.

We are also pleased to announce the law firm of Wintell & Co in China as our latest sponsors.

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

Note from the Editor

Some rather deep reflections on the nature of reportage in shipping and transport in our item 2. Makes you think...


2. Beware the Shipping Hydra

A shipping PR maven writes:-

The media’s coverage of shipping has probably never been better thanks to the digital era even though it’s still regarded as a little understood backwater by the traditional newspapers and broadcasters.

Social media, the internet and sharing sites such as Linkedin and FOB Network have meant that for its own community at least, shipping is actually being discussed more than ever before.

The traditional maritime media has also reacted to this era of Perestroika and now produces in depth and articulate news and commentary on such issues as freight rates, shipping company debt, vessel detentions and other controversial topics. Even the confidential world of the P&I Clubs now comes under scrutiny - to the benefit of the whole shipping community.

The shipping trade and technical/business media plays a vital role in this -- as much as the brokers who have traditionally been the conduits for such bespoke commercial information. But unlike the brokers, whose commercially sensitive ‘breaking’ news and information is largely confined to client only release, the shipping media has the ability to raise matters of industry/public interest in a more independent and questioning manner.

Unlike the broking houses, which have a direct commercial interest in serving their owner-charterer clients, shipping companies are not the shipping media’s direct paymasters. In theory, the principle of publishing without fear or favour should prevail. Admittedly the owner-media relationship is still symbiotic; the trade and technical media do need the industry’s patronage for subscription sales, advertising and sponsorship to make a living.

But the past decade or so has seen far livelier independent, high quality reporting of the industry both online and via the traditional media outlets.

Shipping has never been under more scrutiny than it is today thanks to the Green debate, the need for greater fuel efficiency and a host of other environmental issues which directly affect owners and their ability to operate vessels. Shipping is under the spotlight. An independent, inquisitive media can play a significant role in the debate on these issues and has a central part to play in articulating the views of the industry in a fair and open manner. Likewise, the burgeoning army of shipping PR folk with industry knowledge and an understanding of the issues can play a real advocacy role on behalf of their clients and the industry as a whole.

Industry leaders have long bemoaned shipping’s lack of a clear, independent voice to represent them at the high tables of government and with administrations and regulators. The industry generally does not lobby well. So in a separate but equal sense both an independent trade and technical shipping media and specialist shipping public affairs advisors should both be right at the centre of the current industry debates, stimulating and provoking the conversation.

Sadly the debate is being skewed and limited in many ways , partly through the industry’s own naiveté on public affairs issues and partly by the rise of a new breed of hydra: the independent industry journalist/reporter who doubles up as a public relations guru.

Only in the shipping industry is this strange hybrid creature tolerated. It would be inconceivable for the editor of Computer Week to double up as a paid advocate for Apple products. It would be impossible for the editor of the Financial Times to be a media advisor to the Bank of England. But in shipping, this conflicted behaviour occurs every day. This is a disservice to the shipping industry because the hybrid journalist-PR guru never declares an interest.

The media he works for remains silent as to whether the articles the industry reads and often depends on -- are written independently by journalists seeking and disseminating information truthfully without fear or favour - or by PR people pushing a certain line , agenda , product or service - and being paid by a client do so.

Because there is seemingly no perceived conflict between independently produced journalism and PR spin, can the industry rely on the veracity of what it reads in the shipping media?

Can business decisions be taken on the basis of what is written and how accurate are the perceptions formed by what readers digest? Is that hard hitting editorial you’ve just shared on Linkedin the result of an inquiring piece of independent journalism? or is it a PR line pushed by a Classification Society, for example?

In the shipping media, it’s never clear.

It seems as if the new generation of fearless, inquiring shipping journo-cum-PR spin doctor is totally accepted by the industry as a unique animal. In the maritime world as in Greek mythology, there really is such a monster as a double headed hydra after all.

Not only does the rise of the shipping hydra taint the editorial process and the independent media, it also corrupts the PR-advisory side of the equation.

How do genuine PR practitioners, who represent clients to media in an open and transparent way, compete with the super-journo PR guru? After all, the Journo-PR guru will always pull the ultimate PR client hook line stunt - "Of course the newspaper will cover your story--because I will write the story " (then you can pay me and so too will the newspaper!!) --it’s the ultimate win for any shipping company which has ever considering using a PR firm!

Why use an independent PR firm when we can hire the double headed Shipping Hydra ? This behaviour, which is accepted by many shipping industry leaders--and sadly by many senior shipping media editors too -- represents a gross and internalised conflict.

It does the industry’s image a grave disservice and is sadly a major reason why shipping as a global industry is so far away from having a coherent, grown-up ,articulate and genuinely independent voice to the wider world.

The future of the shipping industry is too important for this behaviour to continue. As long as there is confusion over what is genuine editorial news, comment and opinion and paid-for public relations spin, shipping’s shadowy and often tawdry image will persist in the wider business world. We owe it to ourselves to change this situation.

3. Whatever happened to Ri3k?

Roddy Langley has sent us this report:-

Doha, Qatar [7th April 2013]: The Qatar Financial Centre Authority ("QFCA") today announced that it has reached an agreement to sell Qatarlyst, an electronic trading exchange for the global insurance and reinsurance industry to Ebix Singapore Pte Limited, a subsidiary of Ebix, Inc. (NASDAQ:EBIX), a leading international supplier of On-Demand software and E-commerce services to the insurance industry.

The QFCA believes that Qatarlyst’s divestment to Ebix, Inc. is the best option to leverage Qatarlyst’s capabilities, develop the business and secure wider market acceptance. Ebix will be rebranding the service as a part of its EbixExchange platform worldwide.

Qatarlyst was established in November 2008 to provide the next generation web-based technology solution for brokers and insurance firms to negotiate, place and accept large commercial risks electronically. Qatarlyst has made considerable progress in winning the insurance markets acceptance of its value added web-based services and emerged as a major innovator in the industry.

Ebix’s expertise in the insurance industry coupled with its commitment to open architecture and standards is expected to provide an even higher level of quality of services to Qatarlyst’s customer base. It expands Qatarlyst’s international reach and also offers access to Ebix’s insurance focused staff of approximately 2,000 employees. Ebix’s commitment to the London market modernization program, its existing relationships with top brokers and insurance companies around the world, its existing exchange presence in London, allows it the ability to be the e-platform of choice to power paperless transactions for the commercial insurance and reinsurance industry. Both Qatarlsyt and Ebix intend to work to ensure a seamless transition of the business.

Khalid Al-Mughesib, the Deputy/Acting CEO of Qatarlyst, said, "We are delighted to announce the deal today with Ebix, Inc. With its leading market position, broad geographic reach and relevant experience, Ebix, Inc. is the ideal partner. This is a good outcome all round, and on terms which reflect our investment over the last few years."

Robin Raina, Chairman of the Board, President and Chief Executive Officer of Ebix, Inc, said, "This is an extremely strategic acquisition for us as it puts us in a position to possibly be the utility powering the electronic trading platform for the insurance industry in UK and the Middle East, while providing this service on a utilities basis to the insurance industry."

"Qatarlyst serves over 330 members and facilitates transactions between over 290 different entities drawn from many of the world’s largest and most successful blue chip insurance companies and markets in London, continental Europe and Bermuda such as Aon, Lloyd’s, Swiss Re, and Munich Re." Robin added. "We are looking forward to work with all the key constituents in London, towards ensuring a market-wide use of this trading exchange through all means including the possibility of a broad based industry driven initiative like Placing Platform Limited."

Speaking on behalf of the Qatar Financial Centre Authority, Shashank Srivastava, CEO and Board Member, said: "This is a positive outcome for all parties. The QFCA is pleased to have played such a significant role in the development of Qatarlyst to this stage. Qatarlyst has found a strong new home in which it can further develop and spread its pioneering technology and services, and so contribute to the growth of the worldwide reinsurance market. This is a market with which the QFCA will continue to be fully engaged as it seeks to develop a vibrant reinsurance market in Qatar, serving both the local and international markets."

Ebix disclosed that it funded this transaction completely in cash using its existing cash reserves. No Ebix shares were issued and no investment bankers were involved in the transaction on the Ebix side. Ebix considers the size of the acquisition immaterial at present and thus did not disclose the financial details of the transaction.

{Word in the inns and taverns around Lime Street is that Ebix paid some $2 million for the platform. It would be an irony indeed if the platform takes root in Singapore after so many years of falling on stoney insurance ground in IT skeptical Mother London--ed]

4. Greenwich Maritime Institute

Suzanne Louail, the Academic & Research Manager of the Greenwich Maritime Institute has sent in some information about the courses that are available within the Greenwich Maritime Institute. They have a series of one-day short courses coming up in June which look like good value for money and also an MA Maritime History,MA International Maritime Policy and an MSc Maritime Security. See the attached short course leaflets and for information on the degree programmes go to:-

5. India Approves two Iranian P&I Underwriters

We read this item in Live Mint, the online version of India's national business paper:-

Bangalore: India has approved two Iranian ship underwriters among nine new ship insurers who are not part of a global body and whose liability cover against risks, including oil spills and collisions for foreign s hips calling at India’s ports, will be accepted by the port authorities.

The applications filed by Kish P&I Club, founded by a group of Iranian ship owners on Kish Island located in the Persian Gulf, and Tehran-based Moallem Insurance Co. have been approved by the Directorate General of Shipping (DGS), its deputy nautical advisor and senior deputy director general of shipping (technical), Deepak Kapoor, wrote in a 28 March circular reviewed by Mint. DGS is India’s maritime regulator.

Other new ship underwriters approved by the maritime regulator include Royal & Sun Alliance Insurance, Russia’s Ingosstrakh Insurance Co., Hellenic Mutual P&I and War Risk Association, Navigators Insurance Co., Germany’s Hanseatic Underwriters, British European and Overseas P&I Facility and Osprey Underwriting Agency Ltd.

The approval comes as India implements new rules, making it mandatory for foreign ships entering the country’s ports to hold a valid third-party liability cover against maritime claims.

Such third-party liability risks have to be insured with the London-based International Group of Protection and Indemnity Clubs (IG Clubs) or such other insurance company authorized by the government, according to the new rules that took effect from 20 April last year.

In December, the maritime regulator had authorized QBE Insurance (Europe) Ltd. represented by British Marine, Amlin Corporate Insurance NV represented by RaetsMarine Insurance BV, Korea Shipping Association and Korea Shipowners’ Mutual Protection and Indemnity Association under the provisions of the Merchant Shipping (Regulation of Entry of Ships into Ports, Anchorages and Offshore Facilities) Rules 2012.

In shipping, third-party liabilities arising from operating ships such as oil pollution, wreck removal and damage to port property are commonly referred to as protection and indemnity (P&I).

Globally, such third-party risks are insured with the IG Clubs, a 13-member group based in London that provides liability cover for about 90% of the world’s ocean-going ships, placing a $1 billion limit on individual claims that involve pollution damage and wreck removal. As the global shipping industry goes through a prolonged downturn, fleet-owners are taking cover from non-IG Clubs to cut their operating expenses. The implementation of new port entry rules would have posed a problem if non-IG Club firms that insured ships calling at India’s ports were not approved by the government.

There are other reasons for India to approve non-IG Clubs. The European Union has banned the purchase, transport, finance and insurance of Iranian oil from 1 July, reacting to its nuclear programme. Following the EU ban, IG Clubs have stopped providing third-party liability cover to ships hauling Iranian crude oil. India, the second-biggest buyer of Iranian crude after China and struggling with the fallout of the embargo, has adopted a two-pronged strategy to deal with the EU ban. It has allowed state-run oil refiners to buy crude with ships and insurance arranged by Teheran on a case-to-case basis. It also asked state-run insurer United India Insurance Co. Ltd to provide cover to Indian ships hauling Iran crude for state-run oil refiners.

Accordingly, in July 2012, United India Insurance launched a $50 million third- party liability cover against pollution damage, wreck removal and personal injury claims for local ships transporting Iranian crude. The firm also agreed to extend a separate $50 million cover for hull and machinery to protect local ships against physical damage.

Both the strategies have met with limited success mainly because the National Iranian Tanker Co. does not have enough ships that are suitable to call at Indian ports, while local tanker owners said the United India cover was inadequate for them to travel to Iran to lift the crude.

Mohammadi Banaei, chief executive officer of Kish P&I Club, said that the recent developments, mainly political, have affected the shipping business. "This had led to a tendency to form new P&I Clubs, insurance companies which could loosen the stranglehold of ship underwriters based in Europe," he said in a phone interview from Iran.

"Ship insurance business controlled by a group or limited number of nations cannot be fair and cannot serve the best interests of the people," Banaei said. "The IG Clubs based in Europe have a political face and have become more of a political business rather than give a fair service to the people . They want to control everything; they want to control the world. By controlling shipping, they can control the trade."

Kish P&I Club can cover ship owners’ liabilities up to $500,000 and has reinsured their liabilities above $500,000 up to $1 billion with a consortium of Iranian Insurers backed by a sovereign guarantee from the government of Iran, Banaei said. The cover can be taken by any ship, not necessarily Iranian, that hauls crude oil and petrochemical cargo exported by that country.

6. And Finally...

James Callahan, in reaction to our previous oldster's edition has sent in this joke:

Seniors Travel

A Travel Agent looked up from his desk to see an old lady and an old gentleman peering in the shop window at the posters showing the glamorous destinations around the world. The agent had a good week and the dejected couple looking in the window gave him a rare feeling of generosity.

He called them into his shop, 'I know that on your pension you could never hope to have a holiday, so I am sending you off to a fabulous resort at my expense, and I won't take no for an answer.'

He took them inside and asked his secretary to write two flight tickets and book a room in a five star hotel. Then, as can be expected, they gladly accepted, and were off!

About a month later the little old lady came in to his shop.

'And how did you like your holiday?' he asked eagerly.

The flight was exciting, and the room was lovely,' she said.

'I've come to thank you, but one thing puzzled me. Who was that old bugger I had to share the room with?'


Heavenly Story

Thanks to Paul Dixon for this one:-

A very spiritual, devout and holy priest dies and is immediately swept up to heaven.

St. Peter greets him at the Pearly Gates, and says, "Hello, F ather, we've been waiting for you for a long time. Welcome to Heaven! You are very well known here, and as a special reward, because you are such a spiritual and holy man, we're going to grant you anything you wish even before we enter Heaven. What can I grant you?"

"Well", the priest says, "I've always been a great admirer of the Virgin Mother. I've always wanted to ask her a question."

St. Peter waves his hand, and lo and behold who should approach the priest but the Virgin Mary !

The priest is beside himself, but manages to kneel and say, "Mother, I have always been a great admirer of yours, and have studied everything I could about you and followed your holy life as best I could. I have studied every painting and portrait ever made of you holding the Christ Child, and I've noticed that you are always portrayed with a slightly sad look on your face. I have always, always wondered what it was that made you sad. Would you please tell me?"

"Well", says Mother Mary, "to tell the truth, at that time I was really hoping for a girl."

Jeff Blum has sent in this progress plotter:-

A group of chaps, all age 40, discussed where they should meet for lunch. Finally it was agreed that they would meet at the Ocean View restaurant because the waitresses there were gorgeous, with tight skirts, perky breasts and nice bums.

Ten years later, at age 50, the friends once again discussed where they should meet for lunch. Finally it was agreed that they would meet at the Ocean View restaurant because the food and service was good and the wine selection was excellent.

Ten years later, at age 60, the friends again discussed where they should meet for lunch. Finally it was agreed that they would meet at the Ocean View restaurant because they could dine in peace and quiet and the restaurant had a beautiful view of the ocean.

Ten years later, at age 70, the friends discussed where they should meet for lunch. Finally it was agreed that they would meet at the Ocean View restaurant because the restaurant was wheelchair accessible and had an elevator.

Ten years later, at age 80, the friends discussed where they should meet for lunch. Finally it was agreed that they would meet at the Ocean View Restaurant because they had never been there before and heard it was quite good.

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