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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
