MARINE & ENERGY RISK MARINE & ENERGY RISKhoustonmarineseminar.com/wp-content/uploads/2016/09/HMIS-DAILY-MON...Marine & Energy Risk ... Eric Peters – Managing Director, BRG Staffing

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I S S U E 2 M O N D A Y 1 9 S E P T E M B E R

SPEAKING AS Finland announced it has acceded to the IMO Ballast Water Management Convention, Esben Poulsson said the US had to deliver clarity on its rules for the treatment if ballast.

Finland’s decision sig-nifies that it is likely the IMO Convention will enter into force worldwide in 12 months’ time.

However, the US is not a signatory to the convention instead having introduced its own regime in 2014 which like the convention is designed to ensure that invasive spe-cies are not carried across the world and introduced into other areas of the globe via untreated ballast water.

While the ICS has said that it is now more vital than ever that IMO Member States finalise the revision of the G8 Type Approval Guidelines for treatment systems at the next session of the IMO Marine Environment Protection Committee this October, it has also taken a swipe at the US.

Mr Poulsson said: “We must ensure that shipowners can have absolute confidence that the expensive equipment they will soon have to install will be effective in treat-ing ballast water conditions normally encountered during worldwide operations and be

The Chairman of the International Chamber of Shipping (ICS) has called on the United States to end the uncertainty over its rules on ballast treatment

regarded as fully compliant during Port State Control inspections.

“The fixing of a definite implementation date, after so many years of delay, will at least gives shipowners some of the certainty needed to make important decisions about whether to refit the new mandatory treatment equipment or otherwise to start sending ships for early recycling” Mr Poulsson added. “Unfortunately, the entry into force of the new IMO regime will not resolve the extreme difficulties that still exist in the United States.”

He explained there is still great uncertainty with respect to the more stringent United

States approval regime for treatment equipment, which started to be enforced in January 2014 (the U.S. not being a Party to the IMO Convention).

The U.S. regulations require all ships that discharge ballast water in U.S. waters to use a treatment system approved by the U.S. Coast Guard. However, because no systems have yet been approved, ships already required to comply with the U.S. regulations have either been granted extensions to the dates for fitting the required treatment systems or else permitted to install a USCG accepted Alternate Management System (AMS), in practice a system type-approved in accordance with

3 PROGRAMME 4 NEWS 6 CRUISE SECURITY 8 LIBERTY INTERNATIONAL UNDERWRITERS ROUND TABLE 12 INGA BEALE

the current IMO Guidelines. However, an AMS will only

be accepted for operation for five years, after which time a fully USCG approved system must be installed. But the USCG does not guarantee that an AMS will be subsequently granted full approval. Hence shipowners that may have installed an AMS in good faith, at a cost of between US $1-5 million per ship, might then have to replace the system completely after only 5 years.

“The impasse in the U.S. is a particular concern for operators that have installed ultra-violet systems” observed Mr Poulsson.

The Chamber said the situa-tion has been compounded by the Coast Guard announcing, at the end of last year, that it will not accept the methodology used by other IMO Member States to approve UV treatment systems when assessing the number of viable organisms in treated ballast water.

“ICS will therefore be working with IMO Member States to impress upon the United States the importance of coming to a pragmatic solution. Otherwise, once the IMO Convention finally enters into force next year, the shipping industry will be faced with real chaos.” said Mr Poulsson. m&er

Shipowners blast US over ballast chaos

‘‘ ICS will therefore be working with IMO Member States to impress upon the United States the importance of coming to a pragmatic solution. Otherwise, once the IMO Convention finally enters into force next year, the shipping industry will be faced with real chaos.”’’ Ebsen Poulson, ICS

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Marine & Energy Risk | HOUSTON MARINE INSURANCE SEMINAR 2016 3

MONDAY 19 SEPTEMBER

4:00 – 5:00 p.m. “Risk Identification and Mitigation in the Maritime Labor Sector” (Panel Discussion) Eric Peters – Managing Director, BRG Staffing Kenneth Wayne Bullock II – Shareholder, Munsch Hardt Kopf & Harr, PC Timothy E. Finnorn – Underwriter, The American Equity Underwriters, Inc. Moderator: Ted Dimitry - Vice President, Alliant Insurance Services, Inc. and 2016 Seminar Chairman

5:00 – 6:30 p.m. COCKTAIL PARTY – Grand Ballroom Foyer Registrants and Spouses/Dates

8:30 a.m. OPENING REMARKS

Ted Dimitry - Vice President, Alliant Insurance Services, Inc. and 2016 Seminar Chairman8:45 – 9:30 a.m. What are the Biggest Upcoming Challenges and Opportunities for Insurers?” Ann Haugh – President, Aspen Insurance

9:30 –10:15 a.m. “Economic Trends Affecting the Global

Insurance Economy” (Panel Discussion)

Art Smith – Agrimar Inc., &

Professor, C. T. Bauer College of Business- University of Houston

George O’Leary – Tudor, Pickering, Holt & Co.

Jon Guy – World Business Media

Moderator: Steve Weiss Senior Vice President – Marine, Aspen Insurance

10:15 – 103:0 a.m. COFFEE BREAK10:30 – 11:15 a.m. “The Impact of Low Energy Prices on Shipyards” Steve Hale – President and CEO, Gulf Copper Manufacturing Corporation11:15 - noon P&I Cover and Decommissioning – How They Work Together…” Fabien Lerede – Divisional Claims Director, Offshore, Charles Taylor & Co. Limited, as agents for the managers of The Standard Club Europe Ltd.

8:30 a.m. OpeningRemarks Ted Dimitry - Vice President, Alliant Insurance Services, Inc. and 2016 Seminar Chairman8:45 – 9:30 a.m. “The Impact of Down Oil & Gas Pricing in a Soft Insurance Market – A Broker’s Perspective”

John B. Ludwig – Executive Vice President and Managing Director, Alliant Insurance Services, Inc., Energy & Marine Group9:30 – 10:15 a.m. “Exposure to Risk in International Business Travel – A Guide to Staying Safe in a Dangerous World ” James G. Conway – President and Managing Director, Global Intel Strategies

10:15 – 10:30 a.m. COFFEE BREAK10:30 – 11.15 “Lower for Longer – What it Means for Energy Insurance and How OIL Deals with It” Bertil C. Olsson – President and Chief Executive Officer, the OIL Group of Companies.

11:15 - Noon “Identity Management and Security – How to

Manage Your Cyber Exposure”

Sean McCleskey – Program Coordinator, Center for Identity, The University of Texas at Austin and Special Agent (Retired), U.S. Secret Service

Noon - 1:15 p.m. LUNCHEON – Westin Galleria Hotel

“The Impact of the Texas Navy on Texas

History” Jerry Patterson, President of the Texas NavyAssociation1:15 – 2:00 p.m. “Sharpening the Two-Edged Sword: Proximate Cause and the Number of Occurrences in Marine and Energy Insurance Disputes” Harold K. Watson – Partner, Chaffe McCall, L.L.P. and President, Maritime Law Association of the United States2:00 – 2:45 p.m. “Challenging Times for the North Sea Offshore Industry – An Underwriter’s General Update” Bin Wang – Underwriter, Norwegian Hull Club

2:45 – 3:00 p.m. COFFEE BREAK3:00 – 4:00 p.m. “Maritime Cybersecurity from a Legal and Risk Perspective” (Panel Discussion) Kate Belmont – Blank Rome LLP Nick West – Underwriting Product Specialist and Vice President, Swiss Re Services Limited Pam Mihovil – Insurance and Risk Manager, Marathon Oil Corporation Moderator: Doug Shoemaker – Blank Rome LLP

PROGRAMME

2016HOUSTONMARINEINSURANCESEMINARPROGRAMME

MONDAY SEPTEMBER 19 2016

TUESDAY SEPTEMBER 20 2016


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4 Marine & Energy Risk | HOUSTON MARINE INSURANCE SEMINAR 2016

N E W S MONDAY 19 SEPTEMBER

LONDON MARKET

THE UK’S decision to exit the single market has plunged the London insurance sector into uncertainty and there are many in the market who have decided to ensure they can leap before they are pushed.

Consultants have been hired for a number of marine insurers to identify options for a move inside the European Economic Area if the UK is told it will not enjoy unhindered access to the single market.

Luxembourg has been actively courting underwrit-ers and there have discussions at board level at many firms. Indeed, Lloyd’s Chairman John Nelson hinted that the market may have to look to move certain operations out of Lime Street and into mainland Europe if things do not go their way while Lloyd’s CEO Inga Beale told reporters in Monaco last week that Lloyd’s had not ruled out a move to negotiate with the EU directly.

“It is possible we could even-

London market underwriters are already making plans for life outside of the UK if the European Union plays hardball over passporting rights. important information on the condition of the ship and its machinery when a ship changes owner.

Brexit set to challenge London

tually negotiate directly with the EU, but now is the wrong time to try to start that pro-cess,” Ms Beale told journalists. “We have very good connections in the UK government and we believe they grasp the importance of the issue for Lloyd’s and the London Market as a whole. But it is just impossible to predict timescales on this.”

Given this uncertainty, she said Lloyd’s is pursuing three different avenues as it seeks unfettered access post-Brexit. While one of these is lobbying

the UK government to prioritise a deal for the insurance industry, she stresses that the market “can-not wait for that” and is also pursuing two other solutions.

One is a working group to look at the potential of individ-ual licences with each country in the EEA, the third is the pos-sibility of forming a subsidiary in a EU-member country, to access the market that way, in the same way a company might. However, due to Lloyd’s market structure this option is fraught with complexity.

‘‘ It is possible we could eventually negotiate directly with the EU, but now is the wrong time to try to start that process, we have very good connections in the UK government and we believe they grasp the importance of the issue for Lloyd’s and the London Market as a whole. But it is just impossible to predict timescales on this.”Inga Beale, Lloyd’s

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The views expressed in Marine and Energy Risk Magazine are not necessarily shared by the publisher, World Business media limited. The views expressed are those of the individual contributors. No liability is accepted by World Business Media Limited for any lossto any person, legal or physical as a result of any statement figure or fact contained in this title. The publication of advertisements does not reflect any endorsement by the publisher.

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One marine insurance CEO said: “The market hates uncer-tainty but that is what we have got. There is a view that the UK should invoke Clause 50 to start the two-year timetable.

“The concentration of talent and capital in London means I do not believe we will see the demise of London as a global insurance centre in my lifetime. But if the passporting rights are removed it is almost certain that firms will look to protect their ability to trade across the European single market.”m&er

We see risks that others miss.

Expertise goes deep at Great American. Our specialized knowledge of marine and pollution liability enables us to see the risks that other carriers miss. That’s why our policies keep our customers so well protected.

Ocean Marine Divisionwww.GreatAmericanOcean.com I Contact Captain Ed Wilmot at [email protected] I 301 E. Fourth Street, Cincinnati, OH 45202

Cruise lines warned to address security


N E W S MONDAY 19 SEPTEMBER

CRUISE SECURITY

LAW ENFORCEMENT agencies in Canada, the United States and Australia combined in an operation led to the arrest of three people who were found to have cocaine hidden in their lug-gage as the vessel docked in Sydney. While two females were travelling together the thirds man was not linked to the duo but police believe they may have been transporting the drugs for the same crimi-nal operation.

It has been hailed as a major coup in the battle against drug smuggling, however, Gerry Northwood, COO of interna-tional maritime security compa-ny, MAST warned cruise firms the case highlights the ability for more sinister items to be smuggled onto vessels.

Mr Northwood said: “What was of concern to me was the comments that these sorts of incidents are in some ways inevitable.

“The aim of drug smugglers is to transport the drugs and it does not have an impact on the passengers and crew. That is not the case should a terror group decide to bring weapons or explosives on board.”

He added that cruise com-panies were and continued to take security seriously but that the incident had to act as a wake up call to revisit current systems. There has always been the issue with cruise vessels being used for the movement of illegal items but the rising

Following the seizure of 95 kg of drugs on board the Sea Princess, a leading security expert has told cruise firms there needs to be a renewed look at the issue of safety.Jon Guy reports.

terrorism threat brought a new dimension to the issue.

Mr Northwood said the traditional cruise experience provided the security teams with potential problems that were not issues for other high profile forms of international transport.

“One of the biggest issues is that passengers on cruise ves-sels do not face the restrictions that you see with air travel-lers,” he explained. “There is

not a restriction on the size or weight of luggage which allows measures to be put into place inside luggage to thwart security checks. In airports, passengers, whatever class they are travelling, and crew expect to undergo the same security checks. For cruise vessels the treatment of crew and first class passengers for instance can differ from other passengers.”

“There is also the problem

‘‘ One of the biggest issues is that passengers on cruise vessels do not face the restrictions that you see with air travellers, there is not a restriction on the size or weight of luggage which allows measures to be put into place inside luggage to thwart security checks.’’Gerry Northwood, MAST

with the loading of goods. If a terrorist were to secrete an explosive device inside a con-signment of food it is possible that the explosion would likely happen below the water line with obvious implications for the vessel and the safety of the passengers and crew.”

Mr Northwood said the cruise industry had been for-tunate that there had been no major incidents or attacks on vessels for many years but there was no room for complacency.

“Thankfully there has not been any major attacks cruise vessels by terrorist or criminal gangs in a number of years,” he added. “We have to remem-ber however these are vessels that carry large numbers of passengers and crew and the passengers are predominantly from the western hemisphere.

“Cruise firms need to ensure they carry it due diligence on authorities and people at the ports their vessels are visiting.

“We have seen Islamic State target Sharm el-Sheikh, and the devastating effect that has had on the Egyptian tourist industry.” ”m&er

Cruise lines warned to address security

84% 78% 77%

MONDAY 19 SEPTEMBER

barentsre copy.indd 1 06/09/2016 16:29

8 Marine & Energy Risk | H O U S T O N M A R I N E I N S U R A N C E S E M I N A R 2 0 1 6

A Time of ChangeIn the second of our three roundtable discussions at the 2016 Houston Marine Insurance Seminar, we cast our minds back ten years and ask our panel of market experts for their views on then and now.

RH: There have many changes within this sector and certainly too many to discuss. The main changes are as follows:

l Named Windstorm coverage. Over the past decade the market has been hit with several large losses (Katrina, Rita, Ike). The market responded by imposing very stringent NWS aggregate limits that severely restricted Insureds to be adequately covered for all their exposed assets. After 8 years of benign wind activity, while it is evident that ag-gregates will remain in place, the coverage limits need to be more flexible so that oil companies are adequately covered at a fair premium spend. Lessons have been learned to correctly model and evaluate the risk so that catastrophic events do not cripple the insurance market nor the Insured

What do you see as the biggest changes for the marine/energy insurance sector during the past decade and what ‘if any’ lessons have been learned?Q:

i.e have a balanced risk transfer that works for both the Insured and the Insurer.

l Over capacity. Many new carriers over the past several years have taken opportunity to tap into the energy market. While this is good for the customer i.e a ‘buyer’s market’, this has however been a main ingredient to create a soft market. The abundance of capacity may have a detrimental effect in the long run where many carriers may pull out from writing energy business due to making little or no profit. Such a trend and limitation of available markets may drive a hard market once again. With the current (low) oil prices remain-ing, a hard market would have a devastating effect and available insurance products may become very restrictive and/or expensive.

THE PANEL

Peter MortlockExecutive Vice President JLT Specialty Insurance Services:(PM)

Chris FrickVice President, Marine Claims Liberty International Underrwriters::(CF)

Russel HowesSenior Vice President, Energy / Natural Resources, Willis Towers Watson (RH)

Tommy LaurendineVice President, Risk Engineering U.S. E&P Liberty International Underwriting: (TL)

Josh KirklinSenior Vice President Cobbs Allen (JK)

Richard FalcinelliVice President, Sr. Manager-Marine Risk Engineering at Liberty International Underwriters(RF)

‘‘ After 8 years of benign wind activity, while it is evident that aggregates will remain in place, the coverage limits need to be more flexible so that oil companies are adequately covered at a fair premium spend.’’

HMIS ROUNDTABLE 2 MONDAY 19 SEPTEMBERin association with

Marine & Energy Risk | HOUSTON MARINE INSURANCE SEMINAR 2016 9

NEWS HMIS ROUNDTABLE 2MONDAY 19 SEPTEMBER

A Time of ChangeTL: One of the biggest changes has been the forced decommissioning of the Gulf of Mexico in US Federal waters. For three decades there were 4,000 platforms on the Outer Continental Shelf with about 100 platforms being decommissioned and another 100 or so being installed to maintain an active count of 4,000. Today there are 2,300 active platforms with most of the net reduction of 1,700 platforms

being removed in the last six years. During the storms of 2005 and 2008 more than half of the wells had no production for a significant period of time. Had the federal government enforced its regulations and the wells removed, the number of platforms that were destroyed by those hurricanes would have been significantly less, since the wave loading would have been reduced by the well sur-face area being removed. Only 88 platforms have been installed in the GOM since the 2010.

JK: There have been a number of discrete changes to the marine/energy insurance sector that have occurred over during the past decade. For exam-ple, Macondo highlighted “clash” exposure across books of business, Hurricane Ike and Superstorm Sandy were model busters, and there are others. But the single biggest change is more continuous in nature and also responsible for the prolonged soft cycle that we find our market in today. This change involves the supply of capital devoted to the broader insurance sector. Globally, invest-

ment yields in most economic systems are at historically low levels. Look at interest rates as an example: the number of sovereign states employing negative interest rate regimes is awk-wardly high. Bearing this low yield environ-ment in mind, investors have turned en masse to the insurance business which offers steady re-turns non-correlated to other asset classes. The net effect is a massively oversupplied insurance market serving an energy/marine sector reeling from commodity price weakness.

RF Ten years ago the marine and energy sectors were dealing with the aftermath of Hurricanes Katrina and Rita and the unprecedented level of damage to GOM energy infrastructure. Other significant major events followed, including the Deepwater Horizon blowout, RENA and COSTA CONCORDIA wreck removals, ‘Superstorm Sandy’, the ‘Tōhoku’ earthquake/tsunami and ‘Tianjin’ Port explosions. Over the same period, potential exposure increased in several areas due to global cyber and terrorism events, the introduction of mega containerships, expanded stock throughput cargo coverage, and an upward trend in wreck removal costs. In the face of all of these challenges, mar-ket capacity has continued to expand, depressing rates and creating the perfect storm for insurers seeking profitable business.

‘‘ Today there are 2,300 active platforms with most of the net reduction of 1,700 platforms being removed in the last six years.’’

‘‘ For example, Macondo highlighted “clash” exposure across books of business, Hurricane Ike and Superstorm Sandy were model busters, and there are others.’’

in association with

‘‘ Ten years ago the marine and energy sectors were dealing with the aftermath of Hurricanes Katrina and Rita and the unprecedented level of damage to GOM energy infrastructure.’’’


PM: Price.The significant oversupply remains unabated post the continuing influx of capital after 4Q 2008 and the lack of market changing loss or events. Oversupply has led to the reduc-tion in rates year-on-year. Stagnant demand and falling activity has decimated premium income exacerbated by the oil price collapse starting in the 2nd half of 2014. With the difficulty of matching expense reduction commensurate with income, insurers are doubling down and increas-ing capacity to offset revenue decline and adding further to rating pressures. Plus it would appear

that the ability to draw down from loss reserves to prop up results is coming to an end. From the buyers standpoint, ongoing fiscal pressure is brutal and has severely tested the value of relationships. Absent the complicated claim, insurance is treated as a simple commodity especially where funding is sourced from private equity. Upon polling colleagues, the short answer is no appar-ent lesson learned and we await the inevitable pricing correction once the lack of returns culls supply. But when?

CF: In the last decade, new capacity has entered the market lacking either the necessary level of marine/energy claims expertise or compulsory local claims knowledge, leaving customers underserved when losses have occurred. Some of these new entrants have thin cost structures, and attempt to use internal claims generalists, who while capable of handling a wide variety of situations, are neither trained nor well-versed in marine or energy con-cepts and procedures. LIU’s experienced marine and energy claims staff have encountered multiple situations as slip participants where, in order to best serve our mu-tual customer, we have felt the need to “teach” the lead generalist the proper claim handling methods and nuances particular to a marine or energy claim. The lesson learned is that customers should understand that the purchase of marine and energy insurance is not solely premium based - you are investing in the expertise of the claims department in the event that something goes wrong. In the end, a dedicated marine and energy claims team like LIU’s may save you money, aggravation and your company’s hard-earned reputation. From the operator side, the last decade has seen a much greater focus on safety protocols and culture. Some of our best safety performers are businesses who see value in protecting their employees like family, and others’ property like their own. We are seeing that mind-set develop with ports and terminals, large fleet operators as well as single

HMIS ROUNDTABLE 2 MONDAY 19 SEPTEMBERin association with

‘‘ Recent federal lease auctions within the Gulf of Mexico have demonstrated that oil and gas companies have retrenched with appetite being the lowest since 1986.’’

vessel operators. At LIU, we share their interest, and are very involved in risk engineering of our accounts. We feel that the willingness of the insured to work with our risk engineers for a safer, more intelligent company culture brings out the best in our accounts, leaving our claims staff to handle only those inci-dents which are truly accidents, which likely could not have been prevented by better safety practices. ‘‘

From the operator side, the last decade has seen a much greater focus on safety protocols and culture. Some of our best safety performers are businesses who see value in protecting their employees like family, and others’ property like their own. ’’

‘‘ Oversupply has led to the reduction in rates year-on-year. Stagnant demand and falling activity has decimated premium income exac-erbated by the oil price collapse starting in the 2nd half of 2014.’’

THERE ARE SOME RISKS ONLY A SPECIALIST CAN HANDLE.We’re LIU, the global specialty lines division of Liberty Mutual Insurance. To meet our underwriters and learn more about how they can help you and your clients handle unique risks, visit www.LIU-USA.com.

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Certain coverage may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds.

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LIU_140280_REVOCEAN_P4A4.indd 1 9/11/15 3:50 PM


V E I W P O I N T MONDAY 19 SEPTEMBER

INGA BEALE

IT IS CONFERENCE season and for the marine and energy sector all eyes have turned to Houston.

While the debate over the demand, oversupply and pricing of insurance and rein-surance continues in Texas Lloyd’s CEO Inga Beale says she believes that Lloyd’s has a major role to play on the sector both now and in the future.

However, it comes with chal-lenges and some are challenges that some of Lloyd’s interna-tional peers do not face includ-ing the UK’s impendent exit from the European Union.

Ms Beale has rarely been out of the headlines ever since she became Lloyd’s first female CEO and has used that role not only to steer the world’s oldest insurance market through some tempestuous times but also champion the issue of diversity in business.

The Lloyd’s market is in the midst of delivering in its Vision 2025 strategy, a plan that involves a radical shift in the proportion of its business that is derived from what are currently seen as emerging markets. It is a tough ask with London retaining its business levels in the mature markets but falling behind in the high growth markets of Asia and Latin America.

All this and the prospect of working with a new Lloyd’s Chairman with current incum-bent, John Nelson, set to step

As the HMIS looks at the global issues for the marine and energy market Lloyd’s CEO Inga Beale says co-operation and communication is now vital. Jon Guy reports

down next year.Ms Beale says delivering the

strategy may also take greater diversity in the risks the market underwrites, but it will always be faithful to its roots in mari-time trade.

“Since 1688, when Edward

Lloyd’s coffee house became recognised as the place for obtaining marine insurance, our marine heritage remains the foundation of the Lloyd’s brand,” she explains. “While today marine represents 10% of the market’s premium,

‘‘ Since 1688, when Edward Lloyd’s coffee house became recognised as the place for obtaining marine insurance, our marine heritage remains the foundation of the Lloyd’s brand, while today marine represents 10% of the market’s premium, Lloyd’s continues to play a leading role in marine risk transfer through our three centuries of insights and speciality products.’’Inga beale, Lloyd’s

Lloyd’s continues to play a leading role in marine risk transfer through our three cen-turies of insights and speciality products.

“We also have our world-wide Lloyd’s Agency Network providing 24 hour, year round independent marine surveying and claims adjusting services to the global insurance industry and its customers.”

Ms Beale is bullish about the future for the Lloyd’s market despite the rise of new under-writing centres and a shift in the balance from west to east in global shipping.

“Lloyd’s remains a leader in this marketplace, with aggre-gated capacity which is large enough to accommodate the vast majority of marine risks; Lloyd’s marine underwriters continue to offer innovative, bespoke coverage,” she adds. “The expertise also stretches far beyond marine into all

P&I Club warns of crew illness epidemicIt’s good to talk

MONDAY 19 SEPTEMBER

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Q2 | 2016

| III World leaders head to Singapore for Global Insurance Forum

III Insurers and brokers warned to toughen up their cyber defences

Brexit stage right?London fears vote to leave EU will prompt exodus

IIS | Singapore | 2016ConferenceSupplement

• IIS President and CEO on why the forum comes at a vital time for the industry

• Stephen Catlin explains the aims of the Insurance Development Forum

• Reinsurance under the spotlight in a changing risk environment

Ready to roar?Global insurance leaders meet in the Lion City with innovation on the agenda.

fully covered

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V I E W P O I N T MONDAY 19 SEPTEMBER

INGA BEALEFROM P12

“Lloyd’s remains a leader in this marketplace, with aggregated capacity which is large enough to accommodate the vast majority of marine risks; Lloyd’s marine underwriters continue to offer innovative, bespoke coverage’’Inga Beale, Lloyd’s

types of specialty risks. The risk landscape is changing rap-idly and Lloyd’s is keeping up its reputation as being a key innovator and is the global leading underwriter for instance for cyber insurance.”

Ms Beale says Asia is a region she believes will benefit from the expertise and capacity Lloyd’s can deliver.

“The success of Lloyd’s Asian platforms in China and Singapore is evidence of the demand for the innovative, niche and specialist insurance products Lloyd’s brings to local Asian markets. Many Lloyd’s syndicates have chosen to have local underwriting expertise in the region.

I N S U R A N C E P E N E T R A T I O N“Asia is pivotal to Lloyd’s growth strategy because econ-omies in this region are grow-ing very rapidly, but insurance penetration has not kept pace. Lloyd’s already provides sup-port to economies across the ASEAN region, both locally in some territories, and on a cross-border basis. But we need to see a greater lifting of protectionist restrictions to help de-risk essential econom-ic investment in this region.”

While Asia and the emerg-ing markets remain full of opportunity Ms Beale is set to have to steer the Lloyd’s mar-ket through one of the biggest upheavals since its launched its Reconstruction and Renewal programme to ring fence his-toric losses in 1996 – Brexit.

The vote to exit the European Union has delivered a huge degree of uncertainty and calls from the London market insurance sector for the UK Government to agree a timetable to provide a degree of certainty. Ms Beale says the message from Lloyd’s is quite

simply business as usual.“While Brexit is a hot topic

right now, it’s important to reiterate that there is no impact to Lloyd’s ability to access busi-ness within the EU until the UK actually exits,” she adds. “All policies issued prior to any exit remain in full force. The challenge is predicting what an exit will look like and what access rights the government will negotiate.

“For many EU countries, there are limited restrictions on writing cross-border reinsur-ance in third countries and this also applies in most cases for Marine, Aviation and Transport (MAT) lines of insurance. Therefore, we believe that the marine property classes, hull

and cargo are unlikely to be meaningfully affected. Despite this, we are working on our own contingency plans to enable Lloyd’s underwriters to retain access rights similar to those that are enjoyed today.”

There will be a strong Lloyd’s and London market presence in Houston and Ms Beale says she is happy to see that the issue of cyber risk is set to be discussed.

“Lloyd’s is a leading risk assumer and manager of cyber risk, being a pioneer in cyber specific coverage. We continue to push the boundaries of risk management in assessing the possible impact of cyber losses, and the sources and nature of cyber coverage in

the insurance and reinsurance marketplaces.

“The marine classes are not immune from the possible sys-temic impact of a cyber-attack, which could target a number of marine systems. In our role as a leading marketplace it is incumbent upon us to address, head on, any concerns that we may have arising from this new source of risk and we have created Realistic Disaster Scenarios that we will use to monitor the Market’s expo-sure.”

Indeed she has a message for the wider maritime market on the need for owners, charter-ers, and cargo owners not to simply see insurance as a risk product rather, look to engage with their underwriters to drive better risk management at a time of significant challenges.

S I Z E O F V E S S E L S“In addition to cyber secu-rity which is also a concern for the marine underwriting community, another trend to watch is the increasing size of vessels, in particular contain-er carriers,” she adds. “This concern arises not only for accumulation control reasons, but also from a post-casualty perspective. From a cargo viewpoint the fire and explo-sion at Tianjin Port in 2015 highlights a major concern of accumulated cargo values at major ports globally and the relative lack of exposure information available.

“Close communication between the various maritime stakeholders and their under-writing partners is crucial to understanding emerging risks and establishing risk transfer solutions and risk management techniques which adequately meet the requirements of ship-owners, cargo owners, port and terminal operators.”m&er

‘‘

Alliant Insurance Services, Inc.Energy & Marine Group 832-485-4000

Aspen Insurance 713-730-7178

BC Johnson Associates 281-489-4894

Berkley Offshore Underwriting Managers 832-548-2900

Braemar Adjusting 713-688-5353

Chaffe McCall LLP 713-546-9800

Charles Taylor Adjusting 713-840-1642

Crum & Forster 713-954-8826

International General Insurance Co. LTD 962-562-2009

JLT Specialty Insurance Services Inc. 713-325-7605

Jones Walker 337-593-7661

Lockton Companies, LLC 713-458-5200

Marsh USA, INC 713-276-8000

MatthewsDaniel 713-622-1633

McGriff Seibels & Williams of Texas, Inc. 713-877-8975

Navigators 713-985-5151

Royston, Rayzor, Vickery and Wiliams LLP 713-224-8380

Starr Companies Global Insurance & Investments 713-470-1460

Travelers Oil & Gas 281-606-8541

Willis Towers Watson/Natural Resources & Marine 713-961-3800

Worldwide Facilities, LLC 832-319-6762

Wortham Insurance 713-346-1339

Zurich 713-787-7600

World Business Media Group

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