Embed Size (px)
DESCRIPTION
Houston Marine Insurance Seminar 2002. U.S. Gulf Claims More Predictable Than Ever. September 23rd, 2002. Mutual Insurance - what is it?. It is essentially co-operative self-insurance (a “Club”) The insured are also the insurers The insured's own the insurance fund - PowerPoint PPT Presentation
Citation preview
UK P&I CLUB
Houston Marine Insurance Seminar 2002
U.S. Gulf ClaimsMore Predictable Than Ever
September 23rd, 2002
UK P&I CLUB
Mutual Insurance - what is it?
It is essentially co-operative self-insurance (a “Club”) The insured are also the insurers The insured's own the insurance fund The aim of a mutual is to cover losses, not make a profit
Mutual insurance is different from commercial insurance
UK P&I CLUB
The Clubs in the Maritime Field
The Clubs insure 95% of all ocean-going ships The Clubs have cooperated for over 100 years (Pooling
Agreement 1899) The Clubs’ boards of directors comprise a hugely
influential body of ship-owners The Clubs have consistently acted in the interests of the
maritime community
UK P&I CLUB
Typical Club Structure
D ay-to -d ayM an ag em en t
A p p o in m en tM an ag ers
C on tro llin gP o lic y
E lec tedD irec to rs
M E M B E R S
UK P&I CLUB
Function Of Club Managers
UnderwritingArrange cover; process entries, allocate calls, draw up/dispatch debit notes:
ClaimsHandle and reimburse claims, provide advice, approve some contracts/indemnities, decide on deviation cover, approve costs/fees;guarantees
InvestmentGenerate investment income on Club funds within delegated guidelines
Loss PreventionLegal/technical publications, claims analysis
UK P&I CLUB
Club Financial Structure
OBJECTIVEPremiums + Investment Income = Claims + Expenses
Transfer to Reserves
Return to Members
DEFICIT = Premiums + Investment Income < Claims + Expenses
Transfer from Reserves/ Reinsurance
Further call on Members
SURPLUS = Premiums + Investment Income > Claims + Expenses
UK P&I CLUB
RISKS: Protection & Indemnity
P&I Insurance isinsurance in respect of 3rd party liabilities
P&I Insurance is not hull and machinery insurance, war risk insurance, loss of profit/freight insurance, detention insurance, strike insurance defence
UK P&I CLUB
Core Covers in P&I
Injury, illness or loss of life of passengers Loss or damage to personal effects Injury, illness or loss of life of crew Pollution and environmental damage
Third Party Liabilities in respect of:
UK P&I CLUB
Core Covers in P&I (cont.)
Collision Dock and other Property Damage Fines Legal costs “Omnibus cover”
Third Party Liabilities in respect of:
UK P&I CLUB
0 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000
Shipowners
American Club
Swedish Club
London
N o E
W o E
Skuld
Standard
Japan Club
Steamship Mutual
Gard
Britannia
UK
The World’s Largest P&I Club
International Group - Owned & Chartered - February 2002
Figures in millions GT
UK P&I CLUB
May 2002
Miscellaneous
Bulk Carrier
Chemical Gas Carrier
Reefer
Passenger
Ro/Ro
Vehicle Carrier
Container
Specialist
General Cargo
Tanker
1.6 %
27.3 %
1.0 %7.0 %
1.1 %5.1 %
2.4 %
3.8 %
8.7 %
0.5 %
3.2 %
38.5 %
Trade Sector Market Share (2002)Gas Carriers 32% RoRo 16% Reefer 11% Chemical 7%
Passenger 30% Bulk 14% Combis 10% Tankers 22% Container 12% Dry Cargo 9%
Members by Trade Type - Tonnage
UK P&I CLUB
Global Membership
Club: 11.4%
World: 11.2%
62.3%
55.1%
26.3%
33.7%
UK P&I CLUB
Age Profile of the Club
0%10%20%30%40%50%60%70%80%90%
100%
1996 2001 2002
25 plus
20 - 24 years
15 - 19 years
10 - 14 years
5 - 9 years
0 - 4 years
The Club’s tonnage age profile has reduced in the critical 15 - 19 year age band from 24% to 19% to 17%.
Tonnage under 10 years old increased from 31% to 40% to 41%
UK P&I CLUB
UK Club Reinsurance Structure
Club RetentionPool Retention
Group’s excess R/I
UK Club’s OverspillReinsurance
Overspill pool with other Clubs - cover available from UK Club catastrophe reserve & Swiss Re contract
US$ 5m
US$ 30m
US$ 530m
US$ 2,030m
US$ 3,030m
US$ 4.5bn
OilPollution
US$ 1,000mUS$ 1500m
US$ 500m
US$ 25m
US $ 1470m
US$ 1000m
UK P&I CLUB
Safeguarding Member Quality Six full-time inspectors conduct 500 ship visits a year. Over 5,000 ships inspected since 1990.
Only 3% of inspections led to
adverse report and the number
of inspections generating a high
rating with no comment was up
from 51% to 53% Unsatisfactory findings lead to
independent condition surveys
and restricted cover. Surveys leading to a repair being
required fell from 45% in 2000 to
40% in 2002
UK P&I CLUB
Crew Risk Management Programme
Enhanced pre-employment medical examinations (PEME)
Significant pre-existing illnesses and repatriation avoided
Available in ten crew-supply countries
Unique cost-saving service Development into post-
repatriation care
UK P&I CLUB
Publications & Videos
VIDEOS Tanker Matters Bulk Matters Container
Matters Any fool can
stuff a container . . . .
BOOKS & MULTIMEDIA Major Claims
Analysis The Human Factor Port State Control Carefully to Carry Loss Prevention
News UK Club News
UK P&I CLUB
Loss Prevention
Seminars & Workshops around the world
Weekly Loss Prevention Bulletins
Books, magazines & videos
Full-time department in London & specialist regional managers
UK P&I CLUB
Advice & Information
Concentration of expertise available to all members regardless of size or premium contribution
Databases - Pollution legislation, conventions and procedures, legal and technical enquiries etc.
Past Projects - Millennium Bug (Ship 2000), ISM, STCW etc.
UK P&I CLUB
Loss Prevention Developments New website area
Benchmarking
Good Practice Technical Reports
“How To” guides
ISM Analysis
UK P&I CLUB
Worldwide Statistics
UK P&I CLUB
Stable Claims Trend
Claims Incurred
0
50
100
150
200
250
300
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
UK P&I CLUB
Claims Analysis @ 20/2/2002
74 76 78 80 82 84 86 88 90 92 94 96 980
50
100
150
200
250
300
350
US$ millions
Year
00 02
UK P&I CLUB
10 Most Frequent Claims Producers
0100200300400500600700
NumberValue $m
UK P&I CLUB
Major and Minor Claims Percentages
28%
72%
98%
2%
By Value By Number
Minor Claims % Major Claims %
UK P&I CLUB
Main Types of Major P&I Claims
39%
8%10%
5%
2%
23%
8%
1%
2%2%
CargoCollisionProperty DamagePollutionFinesCrew InjuryWreck RemovalNon-Crew InjuryOtherUnrecoverable GA
UK P&I CLUB
Main Causes of Major P&I Claims
25%
17%
14%
10%
14%
5%
8%
5%
2%
Deck Officer Error
Crew Error
Various Other Causes
Structural Failure
Shore Error
Pilot Error
Mechanical Failure
Equipment Failure
Engine Officer Error
UK P&I CLUB
Human Factors
Fatigue Morale Motivation Loyalty Training Standards of
Certification
Experience Conditions Environment Language Management Policies
UK P&I CLUB
Causes of Crew Injury Claims
0
5
10
15
20
25
30
35
40
Crew error No help EquipmentFailure
Officer Error StructuralFailure
%
NumberValue
UK P&I CLUB
Location of Crew Injuries
05
101520253035404550
WeatherDeck
EngineRoom
Hold Ashore Cabin Galley TweenDeck
Other
NumberValue
UK P&I CLUB
Collisions - Visibility and Sea State
Poor38%
Fair6%
Good56%
Moderate19%
Calm37%
Slight38%
Rough6%
Visibility Sea State
UK P&I CLUB
Tanker Claims
0
5
10
15
20
25
As % Claims in country
As % of all Large Claims
A number % of all large claims in each particular country)
UK P&I CLUB
US Claims Statistics
UK P&I CLUB
THOMAS MILLER (AMERICAS) INC.
Full Claims Handling Service24 Hours a day in YOUR time zone
New Jersey , Miami and San Francisco
UK P&I CLUB
AMERICAS REGION
• 25 experienced claims handlers in New Jersey, Miami and San Francisco
• Full authority for Claims and Guarantees
• Immediate response on major casualties
• Monitoring attorney performance & cost
• Contact with agencies (e.g. Coast Guard)
• Loss Prevention on board Cruise Ships
UK P&I CLUB
Claims Exposure in USA -The reason for local service
25% Industry claims in USA
$ncreasing exposure of Ship-owners in USA
$ 14m a year in legal / survey fees
UK P&I CLUB
Major Claims ($100,000 +) in USA 1987/2002
1014 Claims -- $422M
20% of all Major Claims
40% Personal Injury, 25% Cargo
5%Pollution, Collision, Dock Damage
Numbers Decreasing - Average Value Increasing
UK P&I CLUB
US Seamen Accident Type
0
10
20
30
40
50
60
0
50
100
150
200
250
300
350
Number %Amount Paid %
Amount Paid %
Thousands
%
UK P&I CLUB
US Seamen – Type of Injury
0
5
10
15
20
25
30
35
0
100
200
300
400
500
600
700
800
Number %Amount Paid %
Amount Paid %
Thousands
%
UK P&I CLUB
US Gulf Claims Since February 2000
1,532
47.87 Month
UK P&I CLUB
Claim Since February 2000 cont..,
1,532 - CLAIMS LAWSUITS
TEXAS 567 289
FLORIDA 255 164
LOUISIANA 612 219
ALABAMA 84 16
MISSISSIPPI 14 2
1,532 690
UK P&I CLUB
Mediation
TEXAS 289 - 122 FLORIDA 164 - 111 LOUISIANA 219 - 73 ALABAMA 16 - 4 MISSISSIPPI 2 - 0
UK P&I CLUB
4 Factors Influencing ClaimsTrends In The US Gulf
A New Type of Owner
2. Legal Is it possible to try a case?
3. The Insurance Market Hard or soft Market…..
Does It Really Make A Difference?
4. Personalities How so few influence so much?
2. Legal
1. Corporate
