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Houston Marine Insurance Seminar Tuesday, October 1, 2013 48 th Anniversary

WELCOME. Houston Marine Insurance Seminar Tuesday, October 1, 2013 48 th Anniversary. www.houstonmarineseminar.com. Marine Hull Insurance. Innovation or E volution?. Norwegian Hull Club. Founded in 1837 as a mutual h ull c lub Based in Norway, 3 offices 9000 vessels insured

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Houston Marine Insurance Seminar Tuesday, October 1, 2013 48 th Anniversary

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  1. WELCOME Houston Marine Insurance SeminarTuesday, October 1, 2013 48th Anniversary www.houstonmarineseminar.com

  2. Marine Hull Insurance Innovationor Evolution?

  3. Norwegian Hull Club • Founded in 1837 as a mutual hull club • Based in Norway, 3 offices • 9000 vesselsinsured • 95% ofthe OSV fleet in Norway • 70% of Mobile Offshore Units worldwide • Claims lead – 4800 vessels • More than a capacity provider – Expect More!

  4. Innovation or Evolution? Source: Flickr • Objects insured • Policiesunderwritten • Terms offered

  5. Agenda • Marine or Energy? • Risk Assessmentofthe OSV market • Insuringthe OSV market • Client Services • Summary

  6. I. Marine or Energy? • ClassificationSocietydefinitions • Notations : Drill, Well… • “Worldwide struggle for consensus over FPSOs” Tradewinds Aug. 2013 • Insurance Market • As long as you get the most competitive terms?

  7. Offshore Support VesselMarket • From Offshore Support to WellIntervention • TechnologicalInnovations • Subsea Construction (Deeper Waters) • WellIntervention(Increasedrecovery from wells) Source: Offshoreenergytoday.com

  8. Demand Drives Innovation • “The combination of ultra-deepwater and pressures of 15,000 psi is really going to push the envelope on this technology.” • “Cutting-edge conveyance systems, state-of-the-art tools and innovative ways of using proven, conventional methods are being developed to transform what is often a cost-prohibitive and risky undertaking into a viable option for operators.” • BP Group Chairman said that Aberdeen and other UK centres had developed “a microcosm of technological innovation.”

  9. Experience – Offshore Supply

  10. Developementof GT,SI and Deductible

  11. Values • LOA 88m • H&M Value Index 1 • LOA 157m • H&M Value Index ? 45 Source: DOF

  12. I. Summary • Marine or energydiscussionwillcontinue … • There is innovation in the design • Set yourown guidelines basedonoperations and qualified parameters set by Class, etc. • Ask yourself: What is therationale for the (high) Sum Insured?

  13. II. Risk Assessmentofthe OSV Market • Risk Assessmentwill be thenextstep. • Question: Is the insurance marketable to do a proper risk assessmentof innovative design? “It is better to be vaguely right than exactly wrong.”

  14. Client Risk Assessment SlidingLeft: • From • UWR Experience • To • SupportingTools • Client Experience • PricingTools • InternetSources • More UWR Experience

  15. CRA – Client Risk Assessment • NHC/ DNV Project • Defineyourown parameters • Soft Factors • SafetyCulture • Organization • A SupportiveTool

  16. II. Summary • Understand theoperation and trade • Developunemotional Risk assessmentsupportivetools for selectionof risk • ApplyUnderwriterExperience • Constantlytry to lookbeyondthehorizon for changes and innovationwithinthe segment “Risk comes from not knowing what you're doing.”– Warren Buffett

  17. III. Insuringthe OSV Market • Marine Insurance Market • Nordic Marine Insurance Plan of 2013 is an all-risks setofconditions • Agreeddocumentbetweenthe Nordic Association of Marine Insurers (CEFOR) and the Nordic Shipowners’ Association • Latest revisionsaretheonlysetofconditionsoffered and used • Revisionsreflect, amongstotherthings, theinnovationand evolutionofthemarketinsured • Major evolutionary and experience-driven updates to Chapter 18 – Insurance of Mobile Offshore Units

  18. Insuringthe OSV Market • Develop a pricingtoolbasedonstatistics(CEFOR) • Driving by looking in therear-viewmirror? • Incorporate Global trends (2007 – The annulhorribilisfor the H&M market?) • It is aboutwhatwillhappen, not what has happened. Source: CEFOR

  19. Technical Loss ratio

  20. Markets Today • Over capacity • Lowbarriersto entry Trends • Banks – Basel III • Allocationofcapitalmore selective(less shipping) • Insurance Industry – Solvency II • Allocationofcapitalbasedon risk profile? • Lloyds PMD board– Tradewinds aug. 2013 Variouswaysofdoingthis have been suggested, saidMr. Indge, with marine hull underwriterscollaboratingwithvarious registers, classificationsocieties and the International Maritime Organization to improvetheirunderstandingofthe risks theyinsure.

  21. III. Summary • Trust your Risk Assessment • Understand theoperation and trade in order to offer the best setofconditions to yourclient • Develop and constantlyrevisepricingtools • StayDisciplined!

  22. IV. Expect More • Sustainable service platform • Terms and Conditions • Capacity/Rating • Claims Services/Emergency Support • Client Services • Understand theneedsofyourclients and members • Experience Transfer

  23. CLIENT SERVICES

  24. SUMMARY • Withinthe OSV marketthere is • Innovation in technology • Evolution in theinsurancemarket • In order to stayontop as an insurer • Keep a strongtechnicaland operationalfocus • Understand yourclient • Develop and revise Risk Assessmenttools • Develop and revisePricing Models • StayDisciplined!

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