Placing the Insurance. Friday, September 23, 2016

Transcription

1 Placing the Insurance Friday, September 23, 2016

2

3 Placing the Insurance Friday, September 23, 2016

4 The vessel on risk M/V Norwegian Hull

5 How did we get here? Introduction to the Owner Identify Owners Insurance Needs H&M LOH HI/FI - WAR Identify Owners Philosophy Suggest Insurance Strategy Define Strategic Partners

6 The Role of the Insurance broker Duty to act in the best interests of their clients an owners broker. Acting on behalf of the person effecting the insurance, P.E.T.I. (The Plan Cl. 1-1,1-3) Reasons for using a broker Insurance Expert Market Knowledge Market Access Documentation and Administration

7 Placing insurance through one or more brokers Shipping company (P.E.T.I.) Broker Insurer(s) Covers 100% of the risk more insurers

8 Leading Underwriter OWNERS or MANAGERS (P.E.T.I.) BROKER LEADING H&M (15%) CO-INSUR H&M (10%) CO-INSUR H&M (7,5%) CO-INSUR H&M (12%) CO-INSUR H&M (XX%) +++ Nordic Plan - Chapter 9: Relations between the claims leader and co-insurers

9 Global Marine Market 2014 Line of business

10 Global Hull premium 2014 Norwegian Hull Club s hull premium amounts to 26% of the Nordic Market

11 Norwegian Hull Club: an overview Mutual insurance since 1837 Serving Ship Owners Charterers/Traders Offshore Contractors/Operators Yacht Owners We insure more than units Claims lead for more than 50% 80% of our clients are international

12 Norwegian Hull Club Financial Strength Quality Focus Leading Underwriter & Claims Handler Client Strategic Partnership Broker Long-term strategic partner Added value through experience transfer NHC

13 Norwegian Hull Club 130 employees 14 nationalities 10 years average employment Diversified background Naval architects, master mariners, lawyers, actuaries, economists +++

14 «Our assets are not ships nor steel, but our people: The human capital» Hans Christian Seim CEO Norwegian Hull Club

15 Norwegian Shipping Inc. New potential risk! N O R D I C BROKERS AS

16 Norwegian Shipping Inc. Diversified fleet Highly competent owner A good loss record (sailing fleet only, as-if excl. major claims) Potential for fleet growth N O R D I C BROKERS AS

17 Hull & Machinery (NMIP Ch. 10) Insurance on full conditions covers: Total Loss Salvage Particular Average Collision Liability MV NORWEGIAN HULL : General Average Hull & Machinery SUM INSURED: USD Deductibles: Particular average deductible: USD Ice and machinery deductible: N/A Collision liability deductible: USD General Average amount as per Cl. 4-8: USD

18 Separate Insurance against Total Loss (NMIP Ch. 14) Hull Interest insurance Up to 25% of the H&M sum insured Freight Interest insurance Up to 25% of the H&M sum insured MV NORWEGIAN HULL : Hull Interest SUM INSURED: USD Freight Interest SUM INSURED: USD

19 Loss of Hire (NMIP Ch. 16) Covers financial loss when the vessel is deprived of income as a consequence of damage to the vessel. MV NORWEGIAN HULL : BASIS: 14/90/90 Daily Indemnity: USD Loss Of Hire SUM INSURED USD

20 War Risk insurance (NMIP Chapter 15) Covering physical damage to the vessel as a consequence of war perils All interests covered under the same contract Note: including Protection & Indemnity insurance (P&I) MV NORWEGIAN HULL : War risks SUM INSURED: USD

21 Assessing the risk

22 The Underwriting Process Risk Assessment Public information Owner Data

23 Available Data Technical details Age, tonnage, vessel type, engine type, HP, speed etc.

24 Available Data Operational details Class/class issues, flag, country, size of fleet etc.

25 Available Data Coverage Deductible / LoH basis, conditions, claims lead and insured value etc. Claims statistics 10,00% ,20% 5,00% 5,70% 2,00% 4,10% 0,00% -5,00% -3,90% -10,00% -8,30% -7,00% -6,20% -6,10% -8,40% -15,00% -14,90% change in insured values on renewed vessels

26 Available Data Other issues Detentions, financial performance, affiliation with industry bodies, Rightship score etc.

27 Available Data Fleet history with NHC Underwriter s knowledge and experience

28 Available Data - summarized Technical details Age, tonnage, vessel type, engine type, HP, speed etc. Operational details Class/class issues, flag, country, size of fleet etc. Coverage Deductible / LoH basis, conditions, claims lead, insured value etc. Claims statistics Other issues Detentions, financial performance, affiliation with industry bodies, source, Rightship score etc. Fleet history with NHC Underwriter s knowledge and experience

29 The Underwriting Process Risk Assessment Public information Owner Data Pricing NHC Database CEFOR Database Underwriting Guidelines Based on risk assessment and pricing

30 Databases Hull & Machinery CEFOR >220K vessel years >70K claims 42% of vessels >10K GT in % of vessels with an IMO# in 2015 Loss of Hire Norwegian Hull Club >3,500 vessels per year >250 claims per year One of the largest portfolios in the world Norwegian Hull Club >5,000 vessels per year >1,000 claims per year

31 Determining the Premium Client Risk Assessment tool (CRA) Statistical analysis of mentioned databases Presenting facts from public data sources Market benchmark; the NHC portfolio of fleets More subjective factors Trusting the broker Expecting fleet growth Do we know the management behind? Etc.

32 The Underwriting Process Risk Assessment Public information Owner Data Pricing NHC Database CEFOR Database Underwriting Guidelines Based on risk assessment and pricing

33 Price Underwriting Guidelines Fleets Technical pricing target "Good" fleets "Bad" fleets Reality

34 Market approach vs. Technical approach Clients / brokers Client Claims Client profitability Gut feelings/market knowledge Optimism (or pessimism) Dining and w(h)ining Portfolios and risks Portfolio claims Portfolio profitability Statistical analysis Cynicism Dining and w(h)ining

35 Hull & Machinery Quote Vessel Year Type IMO No. GRT DWT Sum Insured Deductible cl Rate % Premium Akita 2003 Bulk , Aragon 2002 Bulk , Adria 2002 Bulk , Baltic 2012 Tank , Boston 2012 Tank , Bravo 1999 Tank , Norwegian Hull 2004 Cargo ,

36 Hull & Machinery Conditions Subject to the terms and conditions of the Nordic Marine Insurance Plan of 2013, version 2016 Part One and Chapters 10-13, but deductibles as follows in lieu of of the Plan: Akita / Aragon / Adria : $75,000 Baltic / Boston : $150,000 Bravo : $250,000 Norwegian Hull $350,000 Collision deductible: $50,000 General Average amount as per CL of the Plan: $350,000 Sanction limitation & Exclusion clause, as per Cl of the Plan. Trading as per Cl of the Plan Norwegian Hull Club to handle and adjust all claims. Quarterly premium payment Brokerage: 10%

37 Hull / Freight Interest Quote Vessel Year Type IMO No. GRT DWT Sum Insured* Rate %* Premium* Akita 2003 Bulk , Aragon 2002 Bulk , Adria 2002 Bulk , Baltic 2012 Tank , Boston 2012 Tank , Bravo 1999 Tank , Norwegian Hull 2004 Cargo , *each interest

38 Hull Interest / Freight Interest Conditions Subject to the terms and conditions of the Nordic Marine Insurance Plan of 2013, version 2016 Part One and Chapter 14 Upfront premium payment Brokerage: 7,5%

39 Loss of Hire Quote Vessel Year Type IMO No. GRT DWT D / I Basis Sum Insured Rate % Premium Akita 2003 Bulk /90/ , Aragon 2002 Bulk /90/ , Adria 2002 Bulk /90/ , Baltic 2012 Tank /90/ , Boston 2012 Tank /90/ , Bravo 1999 Tank /90/ , Norwegian Hull 2004 Cargo /90/ ,

40 Loss of Hire - Conditions Subject to the terms and conditions of the Nordic Marine Insurance Plan of 2013, version 2016 Part One and Chapter 16 Upfront premium payment Brokerage: 10,0%

41 War Quote Vessel Year Type IMO No. GRT DWT Sum Insured Rate % Premium Akita 2003 Bulk , Aragon 2002 Bulk , Adria 2002 Bulk , Baltic 2012 Tank , Boston 2012 Tank , Bravo 1999 Tank , Norwegian Hull 2004 Cargo ,

42 War - Conditions Subject to the Nordic Marine Insurance Plan of 2013, version 2016 Part One and chapter 15 against war risks as defined in Cl Covers (Cl. 15-2, Interests insured) - total loss and damage - collision liability - hull interest/freight interest - loss of hire - P&I and occupational injury insurance World wide trading, except the areas stated in Joint War Committee Listed Areas as per (JWLA/022) The list may be changed on immediate notice. Claims Leader: Norwegian Hull Club Upfront premium payment Brokerage: 15%

43 Conclude the placing Negotiating terms Evaluation of terms Recommendation to the shipowner Placing the order

44 MARINE COVER-NOTE NO.: / TO: Norwegian Shipping Inc. In accordance with your instructions we have effected insurance as follows: N O R D I C BROKERS AS INSURED: Norwegian Shipping Inc. VESSELS: AKITA IMO No ARAGON IMO No ADRIA IMO No BALTIC IMO No BOSTON IMO No BRAVO IMO No NORWEGIAN HULL IMO No

45 PERIOD: INTEREST: (Norwegian time) Hull and Machinery, values as below N O R D I C BROKERS AS SUM INSURED: 100 % ORDER HEREON: 15 % VESSELS: Value: Rate: Premium (100%): (USD) (%) (USD) AKITA 32,000,000 0, ,600 ARAGON 28,000, ,791 ADRIA 28,000, BALTIC 60,000, ,865 BOSTON 42,000, ,777 BRAVO 48,000, ,776 NORWEGIAN HULL 32,000, ,630

46 CONDITIONS: Subject to the terms and conditions of the Nordic Marine Insurance Plan of 2013, version 2016, Part One and Chapter but deductibles as follows in lieu of Cl of the Plan: N O R D I C BROKERS AS NORWEGIAN HULL : USD 350,000 AKITA, ARAGON, ADRIA : USD 75,000 e.v. BALTIC BOSTON : USD 150,000 e.v. BRAVO : USD 250,000 Deductible as per Cl of the Plan: USD e.v. General Average amount as per Cl of the Plan: USD This policy is written on a the basis of mutual premium and membership with the Norwegian Hull Club. Member: Norwegian Shipping Inc.

47 TRADING: Worldwide subject to trading limitations as per cl. 3-15, but vessels with Ice Class 1A may call at ports in the Gulf of Finland year around without Additional Premium provided sailing conditions approved by the respective Countries Ice / Port Authorities and all rules and recommendations complied with. N O R D I C BROKERS AS MORTGAGEES: It is hereby noted and agreed that the interest of TRUSTWORTHY BANK, as first priority mortgagees to be noted hereunder in accordance with the Nordic Marine Insurance Plan of 2013, version 2016 Chapter 7.

48 CLAIMS LEADER: Underwriters hereon to follow Norwegian Hull Club, on claims handling and adjustments in all respects (excl. ex gratia settlements) in accordance with Chapter 9 of the Nordic Marine Insurance Plan of 2013, version GROSS PREMIUM: USD 896,240 p.a. payable quarterly Brokerage: 10% N O R D I C BROKERS AS SECURITY: 15,00% Norwegian Hull Club 10,00% Allianz Global Corporate Solutions 35,00% Lloyds Underwriters, London 15,00% Groupama Transport 15,00% Assicurazioni Generali 10,00% People s Insurance Company of China % DATE: 13th September 2016 for Nordic Brokers AS as Brokers only

49 EXPECT MORE

50 Lunch