7 JUNE 2016 - ICIC · The Effects •Operating Expense ExceedsIncome •Ship MaintenanceDeferred...

Front cover to be sentby Andy

7 JUNE 2016

Subrogation

Challenges

Subrogation

Opportunities

Challenges

Subrogation

Definition WhyBother?Effect inInsurance

Subrogation

The substitution of one person

or group by another in respect

of a debt or insurance claim,

accompanied by the transfer of

any associated rights or duties.

Effect in Insurance

• Underwritersmust have indemnifiedan insured

• Underwriters must have indemnified an insured

• Effectivesometimeafteroriginal loss arises

Effect in Insurance

Effect in Insurance

• Underwriters must have indemnified an insured

• Effective some time afteroriginal loss arises

• Initialdecisionmakingvestedin the insured

• Underwriters must have indemnified an insured

• Effective some time afteroriginal loss arises

• Initial decision making vested in the insured

• Underwriterscaninheritpoor subroprospects

Effect in Insurance

Why Bother?

• Differencebetweenprofitandloss on account

Why Bother?

• Differencebetween profit and loss on account

• Improvements in risk management

Why Bother?

• Differencebetween profit and loss on account

• Improvements in riskmanagement

• SaferStreets

PNIClubs

Challenges

TheEffects ExpenseTheEconomics ContractTerms

The Economics

• Baltic Exchange DryIndex

• Baltic Exchange DryIndex

• Key EconomicIndicator

The Economics

The Economics

• Baltic Exchange DryIndex

• Key EconomicIndicator

• Dropped 94% inWeeks...

The Effects

• Operating Expense ExceedsIncome

The Effects

• Operating Expense ExceedsIncome

• Ship MaintenanceDeferred

The Effects

• Operating Expense ExceedsIncome

• Ship MaintenanceDeferred

• Increased InsuranceExposure

The Effects

• Operating Expense ExceedsIncome

• Ship MaintenanceDeferred

• Increased InsuranceExposure

• Still Impacting8YearsLater

The Effects

• Operating Expense ExceedsIncome

• Ship MaintenanceDeferred

• Increased InsuranceExposure

• Still Impacting 8Years Later

• TEU Rates Flatlining

The Effects

• Operating Expense ExceedsIncome

• Ship MaintenanceDeferred

• Increased InsuranceExposure

• Still Impacting 8Years Later

• TEU RatesFlatlining

• February2016All TimeLow ForIndex

Challenges | PNI

• Mutual LiabilityInsurers

Challenges | PNI

• Mutual Liability Insurers

• CrucialRole in MaritimeTrade

PNI

• Investment Return

PNI

• InvestmentReturn

• ReverseCBA

PNI

• InvestmentReturn

• ReverseCBA

• Shift in Employment Pattern

Contract

TermsHagueRules

Contract

TermsHague Rules

Limitations

HagueRules

• Errorin Navigationor Managementof Ship

HagueRules

• Error in Navigation or Management of Ship

• Blame Your OwnStaff

HagueRules

• Error in Navigation or Management of Ship

• Blame Your OwnStaff

• Est.40-50%ofall PNIClaims

Limitations

• TimeLimits

Limitations

• TimeLimits

• Package/WeightLimits

Expense

EnglishLaw

Expense

EnglishLaw

ReverseCBA

EnglishLaw

• Increased Writ Fees

EnglishLaw

• Increased Writ Fees

• Adversarial NotInquisitorial

Reverse CBA

• CargoInsurer

• CargoInsurer

• LiabilityInsurer

Reverse CBA

• CargoInsurer

• Liability Insurer

• QuantifyExposure

Reverse CBA

Reverse CBA

• CargoInsurer

• Liability Insurer

• QuantifyExposure

• Offer 65% QuickDeal

Reverse CBA

• CargoInsurer

• Liability Insurer

• QuantifyExposure

• Offer 65% QuickDeal

• Spend 35%Fighting

Compliance

ForumShopping

Compliance

ForumShopping

Authority toAct

Forum Shopping

• ImprovedReturns

Forum Shopping

• ImprovedReturns

• TimeLimits

• ImprovedReturns

• TimeLimits

• Authority toAct

Forum Shopping

Compliance

• SubscriptionMarket

• SubscriptionMarket

• Individual ComplianceIssues

Compliance

• SubscriptionMarket

• Individual ComplianceIssues

• POA From AllInsurers

Compliance

• Wording&FormVaryStateto State

Compliance

Compliance

• Wording &Form Vary State to State

• LeaderApproved

Compliance

• Wording &Form Vary State to State

• LeaderApproved

• FollowersUnaware

Compliance

• Mexico 17 POAs

Compliance

• Mexico 17POAs

• EarlyNotice

Compliance

• Mexico 17POAs

• Early Notice

•Who is the Underwriter?

Compliance

• Danger on Large

Losses