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Transcript of Marine Insurance
Ancient China, Phoencia, Greece and Rome
Ship owner = Shipper => Single Insurance Marine Insurance Market Recent Insurance Market Trends P&I rates rise International Union of Marine Insurance - 1847
Marine Insurace Act - 1906 Global Marine Premium by economic areas (USD Millions) Marine Insurance Market North America: Rising Prices Global Marine Premium 2009 by line of business Total reported: 22.9 USD billion General has an accidental feature and not a willing one The regulations regarding the general average are known internationally as the “York – Antwerp Rules ” Other risks Ship
- Repayment costs higher than replacement
- More than 75% from the value of the ship destroyed
- The ship is lost on sea
- Constructive total loss (the ship exists and may be saved or repaired but these will cost more than the insured value of the ship) FPA > total loss & partial loss
WA&FPA can be extended to include theft, pilferage and non-delivery. Insured amount = value of good + custom duties + cost of transportation, insurance and other costs+
%10* value of goods Second phase
Hull and Cargo insurance developped 13th century Italy - First Marine Insurance Policy
“The Italian form” - 1547
Chamber of Assurances - 1576 Falling revenues Lower asset values, equity and bond yields and interest rates Insurers forced to focus more on pure underwriting profits Higher reinsurence costs Claims costs predicted to decline Hijackings hit new high Europe: Regional Strenght, International Capacity Asia: Growing Confidence Insurable risks in marine insurance General risks Frequent risks based on statistical data and damage rate Majeure force risks (irrespective of human will) Risks with social- political features (revolutions, pirates) Specified risks (implies extra premium) Risks due to the nature of the insured property (breaking, altering, scratching) Average in marine insurance Total Particular a material loss , a degradation of an object no matter its size or cause Load
- Goods disappearance due to the ship sinking or inflaming
- Complete deterioration of the load ( it cannot be sold as merchandise) Total Average Particular Average Characterized by the monetary damage of goods in the direct consequence of force major, navigations faults or goods degradation Includes extraordinary expense made with the rescue of the ship and of the load The damages involve only one party involved in the marine expedition (meaning either the ship or the load) General Average Characterized by the fact that the damage (sacrifice) was made by the captain willingly and consciously in order to save the interests of the parties involved in the maritime expedient The sacrifice should be real (meaning throwing overboard goods not considered worthless) The expenses should be borne by the rescued goods and the sacrificed ones proportionally with their value at the time and place where the marine expedition ended AR- all risks Insurance of goods during transportation FPA- free from particular average WA- with average Exclusions in “all risks” policy Improper packaging Abandonment of cargo Rejection of goods by customs Cargo Insurance – Incidental risks According to their inclusiveness Condition A > Condition B > condition C Insurance of Ships (CASCO Insurance) Total loss, average, liability for collision Total loss, general average,liability for collision Total loss 1 = 2 + particular average Other risks International organizations in marine insurance Protection and Indemnity CLUBS mutual protection level of insurance premiums set on the market Thank you all for your attention! Q&A profit freegross premium unlimited protection (oil pollution - 500 mill USD) group of independent ship owners Protection and Indemnity Club main concern: established the owed contribution burning cost system + + Total damages in suspension % for inflation + % for gen expenses Total damages paid in last 5 year period Avg cost/tone = Weight (tones) of all ships in the club Other risks