Comments by a Hull Underwriter Crew Quality: The Greatest Blind Spot for Marine Underwriters

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Comments by a Hull UnderwriterCrew QualityThe
Greatest Blind Spot for Marine Underwriters

• Holmen Fjordhotell June 11, 2007
• Ole Wikborg
• Norwegian Hull Club

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Punch Line

• Crew recruitment, training and retention is no
  longer a problem, -

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Punch Line

• Crew recruitment, training and retention is no
  longer a problem, -
• ITS IN A STATE OF CRISIS

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Punch Line

• Crew recruitment, training and retention is no
  longer a problem, -
• ITS IN A STATE OF CRISIS
• and marine insurers have yet to understand the
  impact this will have on their bottom lines

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Issues

• Nautical accidents is the fastest growing marine
  claim category in terms of costs
• Nautical accidents hurt the ship owners
  financially
• Nautical accidents may be reduced with increased
  focus on the recruitment and training of
  seafarers

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Issues (contd)

• Marine Underwriters are underestimating the
  future added insurance exposure and claims costs
  resulting from crew shortage, lack of training
  and seagoing experience

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1st issue

• Nautical accidents is the fastest growing marine
  claim category in terms of costs

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2nd issue

• Nautical accidents hurt the ship owners
  financially

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HM Underwriters estimated costs

• Refloating / towing assistance USD 500.000
• Damage repair 925 mt steel _at_ EUR 6,40 USD
  8.000.000
• Dry-docking / general expenses USD 400.000
• Removal expenses / owners costs etc USD
  300.000
• Underwriters exp. and unforseen USD 300.000
• USD 9.500.000

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Ship owners exposures, not covered by insurance

• Offhire / cash-flow
• Loss of management time
• Administrative costs

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Ship owners exposures, not covered by insurance

• Offhire / cash-flow
• Loss of management time
• Administrative costs
• LOSS OF REPUTATION

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Ship owners estimated costs

• Offhire USD 1,800,000
• Extra expenses USD 200,000
• USD 2,000,000

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Ship owners estimated costs

• Offhire USD 1,800,000
• Extra expenses USD 200,000
• USD 2,000,000
• and loss of reputation?

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3rd issue

• Nautical accidents may be reduced with increased
  focus on the recruitment and training of seafarers

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Ship owners historical attitude

• Weak freight market did result in scrutinization
  of all costs
• Crew was a commodity
• Cost of crew had to be minimized
• Short term employments without any long term
  employer commitments

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Ship owners position today

• Booming market
• Newbuilding activity in all shipping sectors
• Little scrapping
• More advanced technology
• More cargo
• More complicated cargo
• More focus on time tables
• More rigid regulatory regime
• Nobody to fill the vacancies

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The Remedies

• Seafarers have to be recruited and retained with
  a long term perspective
• Life at sea is a career, not a short term
  occupation
• Career development
• takes time, efforts and cost money

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The Remedies

• Seafarers have to be recruited and retained with
  a long term perspective
• Life at sea is a career, not a short term
  occupation
• Career development
• Quick fix Improve communication onboard

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• A happy ship is a ship where everybody feel
  included, important and part of the team
• A safer ship is a ship where everybody freely can
  speak their mind and contribute

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• Leadership is
• to influence the crew through Human Relations and
  Communication to make them do what you want them
  to do

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• Leadership is
• to influence the crew through Human Relations and
  Communication to make them do what you want them
  to do
• and still like it..

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4th issue

• Marine Underwriters are underestimating the
  future added insurance exposure and claims costs
  resulting from crew shortage, lack of training
  and seagoing experience

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Underwriters attitude

• Underwriters traditionally look back to determine
  the future
• Assessment of risk is often based on the
  historical performance of each individual client,
  not what the required total market premium should
  be

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Underwriting success is determined by

• the Underwriters ability to
• apply historical information with care
• understand the changing nature of risk
• and apply the premium consequences of these
• influence and encourage the ship owners to
  prioritize long term investment in and
  development of his sea going staff to the benefit
  of all stakeholders
• and to produce an underwriting profit

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and the most important are

• the Underwriters ability to
• apply historical information with care
• understand the changing nature of risk
• and apply the premium consequences of these
• influence and encourage the ship owners to
  prioritize long term investment in and
  development of his sea going staff to the benefit
  of all stakeholders
• and to produce an underwriting profit