1 / 13

Napoli 3 October 2013

Napoli 3 October 2013. Alistair Groom Director, Charles Taylor plc CEO, Standard Club. P AYING FOR LARGE CASUALTIES SHIPPING AND THE LAW 2013. Contents. h ow large claims are funded IG Pool r einsurance c ost allocation f uture. How are claims funded. Pool claims ($9m - $70m).

judd
Télécharger la présentation

Napoli 3 October 2013

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Napoli 3 October 2013 Alistair Groom Director, Charles Taylor plc CEO, Standard Club PAYING FOR LARGE CASUALTIES SHIPPING AND THE LAW 2013

  2. Contents • how large claims are funded • IG Pool • reinsurance • cost allocation • future

  3. How are claims funded

  4. Pool claims ($9m - $70m) • each club pays a percentage share of each Pool claim • percentages change each year • intention is that each club should pay its way over time • what a club claims from other clubs should equal what it pays to other clubs • contribution formula is improved periodically to ensure fairness

  5. Pool claims ($9m - $70m) Clubs contribute to Pool claims according to a formula, reflecting each club’s size and performance

  6. Reinsurance programme ($70m - $3,000m) • reinsurance programme uses all available international markets • unusually favourable reinsurance terms • unlimited numbers of claims payable • full follow terms • capacity is not the problem; pricing is the issue • IG captive (Hydra): • facilitates risk retention • optimises reinsurance buying • is internal to the IG

  7. Reinsurance costs • 4 ship categories: • dirty tankers • clean tankers • dry cargo • passenger ships • reinsurance costs apply across whole International Group

  8. P&I reinsurance rates history $ per gt

  9. Reinsured claims • major casualties • 38 claims have entered the commercial reinsurance layer (above $30m in 2000, $70m in 2013) • 70% were groundings and collisions • navigational errors – not deficiencies in ships, or cargo problems

  10. Reinsurance costs and allocation • reinsurance premium rises • who pays what? • tonnage-rated • driven by record and risk exposure • but large casualties are few, large, volatile and random – very hard to scientifically allocate reinsurance cost: • is a cruise ship the same risk as a ferry? • is a container ship the same risk as a bulk carrier? • is a gas carrier the same risk as a wine tanker? • no simple or right solution, evolutionary process • overriding principle: fairness between members

  11. Payment for record and risk • all shipowners should pay for their own ‘burning’, i.e. routine, claims (<$1.5m) • all shipowners need to contribute to the cost of large / Pool claims – even if they haven’t (yet) had any • all shipowners need to contribute to the cost of reinsurance purchase • the bigger the ship / the lower the premium, the lower the ‘acceptable loss ratio’

  12. The future • the IG system generally works well • huge limits for maximum cover • bulk purchasing for 90% of shipping industry • large claims have gone up in cost and frequency • reinsurance costs will reflect claims • cost allocation under review

More Related