1 future scenarios of marine insurance alessandro morelli 8th october 2012 shipping & the law -...
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Future Scenarios of Marine Insurance
Alessandro Morelli8th October 2012
Shipping & The Law - Naples
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2 Future scenarios of Marine Insurance - A. Morelli
Hull claims 2012
Costa Concordia: H.M. 395M €
Exmar: technological element of risks
Stolt Valor: severe fire risks on tankers
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3 Future scenarios of Marine Insurance - A. Morelli
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2012:strong total loss impact (on uw years 2011 & 2012)
Costa Concordia:Carnival Corporation & PLC website: 508+17 MUSD from H&M insurance.(2Q financial report, issued 02.07.2012)
...and more total losses in excess of 30 MUSD did incur 1st half 2012 (partly attaching to uw year 2011).
Hull – Gross Ultimate Loss RatioUnderwriting years 1996 to 2011
Source: IUMI 2012
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4 Future scenarios of Marine Insurance - A. Morelli
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2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Gross LossRatio at31/12/2011
u/y 2011 at 31/3/2012
Corpi Mercato italiano – Loss Ratio lorda
Sinistri pagati+riservati / Premi lordi
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5 Future scenarios of Marine Insurance - A. Morelli
Attritional losses impacts
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Source. Braemar/Salvage Association
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6 Future scenarios of Marine Insurance - A. Morelli
Shipping Market
Clarksea Index
04/20/23 6
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00/d
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level recovered as economy improved, but has slipped back in 2011 and first half of 2012 Source: Clarkson Research, August 2012
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7 Future scenarios of Marine Insurance - A. Morelli
Insurers facing Challenges: 1
Increasing exposures and accumulations of risks:
Large cruise ships
Ultra large container carriers and their cargo
need to understand new exposures
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8 Future scenarios of Marine Insurance - A. Morelli
New risks scenarios: cruise ships
"Oasis of the Seas" / "Allure of the Seas“ (Royal Caribbean)• 5.400/6.400 pax (2.700 cabins)• 2.100 crew • Length 362 m• Breadth: 60 m • Draught: 9,3 m• Height: 72 m • GT 225.000 Oasis of the Seas (2.700)
vs.
Costa Atlantica (1.000/85.619).
Costa Concordia: 1.500/114.000
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9 Future scenarios of Marine Insurance - A. Morelli
New risks scenarios: container ships
20/04/23 9
Triple E Maersk Line
18.000 TEU’s
440 mt. length
59 mt. breadth
16,5 mt. draught
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10 Future scenarios of Marine Insurance - A. Morelli
New risks scenarios: container ships
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• Strong increase of orders of post-panamax ULCS
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11 Future scenarios of Marine Insurance - A. Morelli
Potential Exposures and Accumulations
New cruiseship values: $ 1.000.000.000
Ultra Large Containership: Hull Value $ 500.000.000 18.000 TEU’s carrying capacity 20’ container average value: $ 50.000 /100.000 Total cargo value: $ 900.000.000 / 1.800.000.000 Total Value (hull+cargo) $ 1.400.000.000 / 2.300.000.000
Costa Concordia (HM +IV) = $ 500.000.000
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12 Future scenarios of Marine Insurance - A. Morelli
Main Insurers on European Marketsand Underwriting Capacity (*) UK: 600M
Lloyds / RSA / XL / Lancashire
Nordic: 200M GARD / Norwegian Hull Club / Swedish Club
France: 200M AXA / Allianz / Groupama Transport
Italy: 100M Alleanza Toro / Ariscom / Assitalia / AXA C.S./ Generali / Siat Swiss Re C.S.
Total Capacity 1.100M / 1.200M Overcapacity in
respect of current risks but what about future exposures?(*) internal estimate AXA C.S. - millions $
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13 Future scenarios of Marine Insurance - A. Morelli
Insurers facing Challenges: 2
Solvency II scheduled for 1/1/2014
Adoption of internal model of risk assessment
Greater attention to profitability
Economic Combined Ratio (“time value”)
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14 Future scenarios of Marine Insurance - A. Morelli
CONCLUSIONS
Difficult situation both for Insurers and Shipowners
Insurers need to balance their accounts
What is the way out?
Risk Management and Loss Prevention policies
Paris MOU NIR: ship risk profile
Facilitate long term relationships
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15 Future scenarios of Marine Insurance - A. Morelli
Thank you for your attention