standard club update - pandi-indonesia.com · standard club update . contents –key metrics...
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Key data
– 2012/13 premium income: $300m
– current tonnage insured: 129m gt
– free reserves: 20 February 2013 forecast, unaudited $361m
– S&P A rated (strong) with stable outlook
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0
50
100
150
200
250
300
350
400
50
75
100
125
150
2007 2008 2009 2010 2011 2012 2013forecast
Tonnage Free Reserves Premium
Key metrics
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$ Million GT Millions
2011 figures are restated to take into account the re-organisation of the Standard Clubs
Ship types by tonnage
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Tankers Small craft
28% 27% 24% 13% 6% 2%
Dry bulk Container and general cargo
Offshore Passenger and ferry
Where we do business
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CANADA 7%
USA 9%
SOUTH AMERICA 1%
REST OF THE WORLD 5%
UK 5%
SWITERLAND 3%
MONACO 3%
GREECE 11%
QATAR 3%
ITALY 9%
THE NETHERLANDS 3%
GERMANY 9%
TURKEY 3%
REST OF EUROPE 7%
JAPAN 8%
SINGAPORE 5%
ASIA PACIFIC 5%
REPUBLIC OF KOREA 5%
Standard Asia
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Director and General Manager
Regional Claims Director
Gillian Musgrave
Claims Directors
SD Shim
Edgar Chin
Claims Executives
Yasmine Tyebally
Niccole Lian
Moses Lin
Jason Wee
Kin Cheung Kung
Claims Assistant
Tjen Soe Ni
Surveyors
Yves Vandenborn
Christophe Vaes
Claims Loss Prevention
Nick Sansom
Underwriter
Charles D’Alton
Deputy Underwriter
Nick Taylor
Underwriting
Assistants
Risheng Lin
Noraini Mustaffa
Sarojini Ratinam
Tiffany Teo
Underwriting
Support
Mary D’cruz
Finance
Financial Controller
Anna Chua
Credit Controller
AiRene Yee
Claims Manager
Lucinda Lui
Claims Executive
Jason Ho
Hong Kong
Offshore Regional
Claims Director
Sharmini Murugason
Offshore
Current financial influences
– difficult financial markets, small investment gains so far this year
– P&I claims generally stable but:
– general P&I claims inflation has not abated
– general under-rating across the market as a whole
– many members suffering financially
– defence claims continue at a much higher level since 2008
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1 Sovereign bonds 43.9%
2 Corporate bonds 30.7%
3 Equities 14.9%
4 Alternatives 2.7%
5 Cash 7.0%
6 Gold 0.8%
Asset allocation
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1
2
3
4 5 6
As at 20 September 2012
8.6
-17.4
18
9.9 6.7
3
-20
-15
-10
-5
0
5
10
15
20
2008 2009 2010 2011 2012 Feb -Sept 2012est
Investment return
10
%
P&I claims
– current policy year
– not bad compared with recent policy years at half-year stage
– fewer large claims within the club’s own retention
– earlier years
– claims stable or improved for most back years
– several large claims but fully reserved
– Costa Concordia not a major financial impact for the club
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1 FFO 10%
2 Collision 9%
3 Wreck 2%
4 Cargo 32%
5 DTH 3%
6 Personal Injury 33%
7 Fines 4%
8 Pollution 8%
9 Other 3%
P&I claims by claim type
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1
2
3
4
5
6
7 8 9
2006-2012 capped at $1.5m per claim
Claims – this year / last year as at 20 September
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claims abated $8m
$ Million
30.9
15.9
5.8 8.6
23.7
1.4
22.1
5.0 5.7 1.7
15.7
1.0 0
5
10
15
20
25
30
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Cargo Collision Other FFO Personal Injury Pollution
2011 as at 20 Sept 2011 2012 as at 20 Sept 2012
Claims environment
– collision claims
– high number of large collision claims
– piracy update
– armed guards on board ships
– the new Standard Club Kidnap & Ransom facility is now up and running
– sanctions issues
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Defence claims
– 2008/09
– is the current most expensive year
– 2010/11
– may prove to be the most expensive
– 2011/12
– charterparty disputes
– delays caused by loading of nickel ore
– piracy hijack incidents
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Club development
– new covers:
– kidnap and ransom cover
– traders’ transport cover
– professional liability cover
– widening the offering
– growing the service
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Underwriting performance
– forecast combined ratio for financial year to 20/2/13: 106%
– forecast combined ratio for policy year to 20/2/13: 110%
– underwriting deficit not likely to reduce without specific action
– claims costs inflation
– minimal investment income expected next year
– strong free reserves, but need to maintain financial strength
– But: many members continue to experience difficult trading conditions
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Renewal issues
– IG GXL reinsurance
– renewal – general increase agreed by the board 12/10/12
– deductibles
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New club covers
– kidnap and ransom cover
– traders’ transport liability cover
– professional liability cover
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The covers
– launched in July 2012
– developed because members value the club’s service
– supported by reinsurance from the Lloyd’s and London market
– www.standard-club.com/ProductsAndServices/NewCovers
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Kidnap and ransom cover
who is this cover designed for?
– the cover provides protection for the cost of ransoms paid to free ships seized by pirates and associated losses
why is this cover better than what is currently available?
– members of the club benefit from a more joined-up approach to the placing and servicing of this risk and the resolution of piracy incidents
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Kidnap and ransom cover
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what is covered?
– kidnap and ransom and associated expenses including loss of hire
– loss of ransom in transit
– liabilities to crew arising from piracy incidents
– legal expenses and the costs of ransom negotiators
Professional liability cover
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what is this cover?
– professional negligence liability cover for ship agents and ship managers
who is this cover designed for?
– shipowners who are responsible for ship agents’ activities
– shipowners who manage third party ships
Professional liability cover
what is covered?
agents’ professional negligence:
– bills of lading
– property damage
– personal injury
– fines
– exceeding authority
– cargo disposal costs
managers’ professional negligence:
– technical management
– crew management
– commercial management
– property damage
– personal injury
– fines
– exceeding authority
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Traders’ Transport Liability Cover
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who is this cover designed for?
– companies engaged in commodity trading where the majority of the cargo is transported by ship
why has this cover been developed?
– current insurance offerings involve multiple placements
– this is a dedicated product to cover third party liabilities arising out of commodity trading, including transportation
Traders’ Transport Liability Cover
what is covered?
liabilities arising from:
– pollution liability incurred as charterer or cargo owner
– personal injury
– property damage, including damage to chartered ships
– extended third party cargo liability on board chartered ships
– products liability
– loss of hire arising from lawful detention and piracy
– including war and terrorism risks
during:
– transporting, including use of pipelines
– storing
– mixing, blending
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Summary
– introduction to the MLC
– liabilities under MLC 2006
– abandonment
– financial security
– compliance / condition of cover
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What is the MLC 2006?
– the ―Fourth Pillar‖ of the international maritime regulation which provides comprehensive rights and protection at work for the world's 1.2m seafarers and supports fair competition for quality ship owners.
Titles
1. Minimum requirements for seafarers to work on a ship
2. Conditions of employment
3. Accommodation, recreational facilities, food and catering
4. Health protection, medical care, welfare and social security protection
5. Compliance and enforcement
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Ratification and entry into force
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Ratification
Liberia, Marshall Islands, Bahamas, Panama, Norway, Bosnia and Herzegovina, Spain, Croatia, Bulgaria, Canada, Saint Vincent and the Grenadines, Switzerland, Gabon, Benin, Singapore, Denmark, Antigua and Barbuda, Latvia, Luxembourg, Kiribati, Netherlands, Australia, St Kitts and Nevis, Tuvalu, Togo, Poland, Palau, Sweden, Cyprus, Russia, Philippines
Entry into force: 20 August 2013
Enforcement
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Article V, paragraph 7
– Each member shall implement its responsibilities under this Convention in such a way as to ensure that the ships that fly the flag of any State that has not ratified this Convention do not receive more favourable treatment than the ships that fly the flag of any State that has ratified it.
– A ―Recognized Organisation‖ (RO) of flag state / Port State Control can (if deficiencies represent a serious breach of the MLC) prohibit a ship from leaving a port until deficiencies are remedied.
Liabilities under MLC 2006
– liabilities arising under MLC 2006 are covered according to the rules.
– repatriation?
– cover with club’s retention?
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Are they covered?
Financial security
– requirement for owners to provide evidence of financial security
– will P&I club certificate of entry suffice?
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Condition of cover
— compliance with statutory requirements = mandatory under the club rules
―15.1 (5) the member must comply with all statutory requirements of the ship’s flag state relating to the construction, adaptation, condition, fitment, equipment, manning and operation of the ship and must at all times maintain the validity of such statutory certificates as are required or issued by or on behalf of the ship’s flag state…‖
— Port State Control
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Conclusion
– P&I cover in place for many of the liabilities assumed under MLC 2006.
– repatriation arising out of ―Abandonment‖ not poolable but may be covered within club retention
– P&I clubs investigating if COE can be accepted as financial security
– compliance with MLC 2006 will be a requisite of club cover
– how can the P&I clubs help?
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Fatigue – the issue
– sleeping not watching
– if 8 hours sleep required and 7 hours received, there is a 1 hour sleep deficit
– sleep deficits are accumulative and can only be eliminated by sleeping
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Horizon – what was involved?
– measuring the performance of volunteer groups of ships’ officers working on a bridge, engine room and cargo simulator during a 7 day period when working either a 6-on 6-off or 4-on 8-off watch system
– 90 volunteers taken from a manning agency or directly recruited from advertisements
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Horizon – what was measured
– sleep and wake diaries kept to measure periods of sleep and activity
– Actiwatch used to measure activity
– Stroop test (colour word) to measure selective attention. It shows green words in red ink
– Psychomotor vigilance test to measure reaction time
– brain and eye movement measured by EEG and EOG
– Karolinska drowsiness test – black dot on a wall
– sessions videoed – movement, standing and sitting observed
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Karolinska sleepiness scale
– 1 – extremely alert
– 2 – very alert
– 3 – alert
– 4 – rather alert
– 5 – neither alert or sleepy
– 6 – some signs of sleepiness
– 7 – sleepy, no effort to stay awake
– 8 – sleepy, some effort to stay awake
– 9 – very sleepy, great effort to stay awake
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Self measurement every hour against the scale below
Results
– more sleepiness during 1st watch of the day
– alertness test results worst during first watch
– sleepiness increased during the watch
– free watch disturbance increased sleepiness
– more sleepiness on 6 and 6 than 4 and 8 watch system
– more fatigue when working 6 and 6
– highest sleepiness on night watch – the graveyard watch!
– 30% of participants fell asleep, sleeping on every watch
– more falling asleep during first watch or after the disturbed free watch
– generic duties fulfilled, sleeping did not affect performance!
– no difference between bridge and engine room
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Fatigue prediction - Martha
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http://www.warsashacademy.co.uk/research/horizon/martha.aspx