THE ROLE OF INSURANCE

1
Quality in ShippingWorkshop Athens, 14 November
2001
EU ADVANCES Thematic Network

• THE ROLE OF INSURANCE

Tore Forsmo The Central Union of Marine
Underwriters
2

• When you are a Bear of Very Little Brain, and
  you Think of Things, you sometimes find that a
  Thing which seemed very Thingish inside you is
  quite different when it gets out into the open
  and has other people looking at it.
• A.A. Milne 

3
Marine Insurance

• Question 1
• Are marine underwriters REALLY concerned about
  safety and quality at sea ?
• Question 2
• Do marine underwriters have a RESPONSIBILITY for
  safety and quality at sea ?

4
Marine Insurance

• And the answer is
• YES !

• 1 Safety for life (PI), property (HM) and
  the marine environment (PI)
• 2 Business ethics and moral responsibility, but
  no legal obligations under international
  maritime conventions (IMO)

5
The Chain of Responsibility ?
6
The Safety Regime

• Shipowner
• Class Society
• Flag State
• Port State

!
Safety and Quality All of the above have legal
obligations under national and international law
!
7
Marine Insurance

• A financial transaction
• Never see the client (brokers market)
• Never see the claims (adjusters market)
• Price focused (commodity market)
• Survival strategy Volume / Economy of Scale
• Example
• Lloyds of London

8
Marine Insurance

• A risk transaction
• Close and long term client relationship
• Client friendly insurance conditions
• Competence (maritime/insurance/risk)
• Service focused / product development
• Survival strategy Value added services / Economy
  of Scope
• Example
• Norway / Scandinavia, PI, DEX, Marianne

9
Higher focus on safety and quality
Niche
Delivery
Economy of Scale vs. Economy of Scope
Less focus on safety and quality
Write the market
Distribution reliance
10
Promoting SafetyNMIP 1996

• 3-14 Loss of class orchange of
  classificationsociety
• 3-22Unseaworthiness
• 3-24,25Safety regulations and breach of safety
  regulations

11
www.cefor.no
12
Quality Underwriting

• Guidelines for underwriting
• Condition surveying
• Auditing of company and fleet
• Review of claims records
• Review of
• Port State detentions
• Class records, suspensions and withdrawals

13
Loss Prevention

• Claims analyses
• Loss Prevention circulars and publications
• Training and seminars
• UWR Specific Initiatives
• Safety and Improvement Reporting System (SAFIR)
• Contingency and Emergency Training
• Firefighting Training

14
Examples

• of 426 vessels in USCG Qualship 21 programme,
  189 vessels (44.4 per cent) are insured through
  Gard Marine
• of 426 vessels in USCG Qualship 21 programme, 96
  vessels (22.5 per cent) are insured through Gard
  PI
• ISM Code Swedish Club
• Positive Claims Statistics
• Premium rebates for early ISM implementation

15
Conclusion
Were

• Just like class societies, marine underwriters
  is a non-homogenous entity!
• Sub-standard operators exists!
• However, the serious actors DO contribute to
  maritime safety and quality!

Questions ?