Hull claims 2012

1

Future Scenarios of Marine Insurance

Alessandro Morelli8th October 2012

Shipping & The Law - Naples

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


0%

20%

40%

60%

80%

100%

120%

140%

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

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


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

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


Attritional losses impacts

5

Source. Braemar/Salvage Association


Shipping Market

Clarksea Index

04/21/23 6

0

5

10

15

20

25

30

35

40

45

50

55

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

$'0

00/d

ay

level recovered as economy improved, but has slipped back in 2011 and first half of 2012 Source: Clarkson Research, August 2012


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


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


New risks scenarios: container ships

21/04/23 9

Triple E Maersk Line

18.000 TEU’s

440 mt. length

59 mt. breadth

16,5 mt. draught


New risks scenarios: container ships

21/04/23 10

• Strong increase of orders of post-panamax ULCS


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


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 $


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”)


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


Thank you for your attention

Hull claims 2012

Documents

Transcript of Hull claims 2012