MEMBER MEETING 13 & 16 DECEMBER 2014 OSLO & BERGEN

DNK FIGURES – Q3

Sverre Huse - CFO

RESULTAT PER 3. KVARTAL 2013, USD

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9M 2013 9M 2012 12M 2012Resultat fra virksomheten USDm USDm USDmResultat fra forsikringsvirksomheten 16,1 22,3 10,7

Resultat fra finansvirksomheten 23,9 52,9 68,9

Resultat før skatt og avsetninger 40,1 75,2 79,6

Til/ fra forsikringstekniske avsetninger (40,1) (75,2) (83,0)

Resultat før skatt 0,0 0,0 -3,4

Skattekostnad 0,0 0,0 3,4

Resultat etter skatt 0,0 0,0 0,0

Sikkerhetsavsetning inklusive egenkapital 763,4 715,4 723,3

Avkastning 3,7 % 8,5 % 11,2 %

PREMIEJUSTERING FOR «REISER»; NCB

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INVESTERINGSPORTEFØLJEN

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RECENT DEVELOPMENTS IN THE MARITIME SECURITY SITUATIONIngrid Mellingen, Security Analyst

REPORTED PIRACY INCIDENTS – 2013 (CUT OFF DATE: 13TH DEC)

REPORTED PIRACY INCIDENTS – 1MONTH (CUT OFF DATE: 13TH DEC)

SOMALI PIRATES STILL A THREAT?• Capability still intact• Intent to attack international shipping• Navies are deterring PAGs from reaching sea lanes• Exchanges of fire between pirates and armed guards

REPORTED PIRACY INCIDENTS – 1MONTH (CUT OFF DATE: 13TH DEC)

GULF OF GUINEA PIRATES OR NIGER DELTA PIRATES?• Increasing or decreasing? Not a new threat• Most incidents are off the Niger Delta• Pirates have a region wide reach• Modus operandi is different from Somalia. Important to analyse the

threat

DNK INSURANCE COVER 2014

Iris Østreng – Legal Counsel

DNK 2014 COVER AT A GLANCE• Automatic renewal• Unchanged conditions• 10% reduction on annual premium • Automatic extension of insurance to mortgagees and other named co-

assureds

SANCTION LIMITATION AND EXCLUSION CLAUSE (CL.4)

• The Association shall not be deemed to provide cover and the Association shall not be liable to pay any claim or provide any benefit hereunder to the extent that the provision of such cover, payment of such claim or provision of such benefit may expose the Association to any sanction, prohibition or restriction under United Nations resolutions, or the trade or economic sanctions, laws or regulations of the European Union, the United Kingdom, the United States of America, France, the Russian Federation, the People's Republic of China or any State where the Association has its registered office or permanent place of business.

• In the event of the subject-matter insured having been engaged or engaging in any

activity whatsoever that may expose the Association or his reinsurers to any sanction, prohibition, restriction, law or regulation as described in the above paragraph the Association shall be entitled to terminate the insurance by giving 7 days’ notice. Termination also applies to the rights of the mortgagee, but the Insurer shall immediately notify the mortgagee of the termination.

NOTICE OF ASSIGNMENT AND LOSS PAYABLE CLAUSE

• Remember : war risk insurance also includes war P&I insurance

• LPC need to reflect the opportunity to reimburse the member or third party in case of P&I claims

• «Any sum payable under insurances against protection and indemnity risks or any liability towards third parties shall be paid directly to the person to whom the relevant liability was incurred or to the owner in reimbursement to it of monies expended to discharge that liability.»

”HORN OF AFRICA (HOA) SUPPLEMENT”COVER AGAINST PIRACY IN THE INDIAN OCEAN

Costs related to Hijacking

• Reasonable costs, cf. §§ 4-7 and 4-12 NMIP ‐ Ransom‐ Related costs, e.g. negotiatior

• Not limited to vessel’s proportion• No need to declare GA• Payment on account (cf. § 5-7

NMIP)

Loss of Hire

• No deductible• No self-insured retention• Other limits remain‐ 100,000 USD max. daily

amount‐ 30,000,000 USD per

occurrence and in all‐ 180 days

INSURANCE CONDITIONS FOR DNK MEMBERS• Nordic Marine Insurance Plan‐ War perils, § 2-9‐ General conditions ‐ Chapter 15 on war risk insurance‐ Previous special rules for DNK members in

Chapter 15 now in policy conditions• DNK policy‐ Extended / special covers

PERILS AND LOSSES COVERED WITH DNKPerils covered, § 2-9 NMIP

• War, war-like conditions

• State power intervention

• Terrorism and similar acts

• Piracy

Losses covered

• Hull & Machinery

• P&I and occupational injury

• Loss of Hire

• Special covers

.. under one policy

HULL & MACHINERY COVER• Loss, damage or collision liability and hull/freight interests

• Equivalent sums insured under war and marine policies

• 14 days’ notice for changes in sum insured

WAR P&I AND STANDARD P&I COVER • Amended provisions in Chapter 15 in the 2010 Plan

• Clause 15-20: War cover provided by Chapter 15 is seamless in relation to the war exclusion clauses used by International Group of P&I Clubs.

▪ Reference to Gard conditions as default

• Clause 15-22: Cover provided by P&I clubs is subsidiary to the war cover provided by Chapter 15

• “First layer” war P&I cover with USD 300 mn limit

LOSS OF HIREStandard Cover NMIPChapter 15, Section 6 and Chapter 16 of NMIP

• Physical damage• Blocking and trapping • Not triggered by piracy• Open cover• 7 day deductible / 14 days in

conditional trading areas• 180 days

Additional Cover DNKParagraph 9 of DNK Insurance Conditions

• Non-physical damage (H&M or P&I incident to vessel)

• Triggered by piracy• Open cover• Limits:

‐ 7 day deductible‐ 10% self-insured retention‐ 100,000 USD max. daily limit‐ 30,000,000 USD per occurrence and in

all‐ 180 days

DNK SPECIAL COVERS, CHAPTER 15 NMIP

Major Powers war• Automatic Termination as basic rule (§ 15-5)• 30 days, maximum aggregate limit of USD 1 billion

Radioactive perils and Requisition by own Flag State• RACE exclusion as basic rule (§ 2-9 (2) (b))• no cover for requisition by own flag state as basic rule (§ 2-9 (1) (b))• USD 150 mill per vessel per year and in aggregate per annum

Contingency expenses related to Biochemical weapons• For passenger vessels: 2.5 mn USD per vessel/occurrence, 25 mn USD in aggregate per

annum• For all other vessels: 7.5 mn USD per vessel/occurrence; 75 mn USD in aggregate per

annum

THANK YOU!

For more information please vist – www.warrisk.no