1 OPG Shipping & Insurance Seminar
Marine Cargo Insurance & Shipping
Sibesh Sen Tata AIG General Insurance Co Ltd.
2 OPG Shipping & Insurance Seminar
Case Study 1
Agent : Johnny BegoodInsured Name : 5 Roses Inc. Perfume MakersCargo : 12,000 mt of grade A1
FishmealPacking : In bulkVoyage/Transit : Lima, Peru- KathmanduSailing date : 26.01.12Conveyance : Vessel Dragon StarValue : USD 10,560,000/- (CIF +10%)Cover requested : ICC-A with $10,000 deductible
3 OPG Shipping & Insurance Seminar
DRAGON STAR
EX-NAME : ZIYA STYPE : BULK CARRIERFLAG : PANAMACLASS : PRBUILT : 1974GRT : 5320DWT : 11250P&I : NOT KNOWN
4 OPG Shipping & Insurance Seminar
UNDERWRITING WISDOM
THE MORE YOU ASK,THE MORE YOU KNOW!THERE ARE NO STUPID QUESTIONS,ONLY STUPID ANSWERS!
NEVER EVER ASSUME!
5 OPG Shipping & Insurance Seminar
ICC Clauses-Risks Covered
Loss / damage to the subject matter insured reasonably attributable to /caused by:1. Fire or Explosion;2. Vessel or craft being stranded, grounded, sunk or capsized.3. Overturning or derailment of land conveyance;4. Collision or contact of vessel craft or conveyance with any external object ….5. Discharge of cargo at a port of distress;6. General Average Sacrifice;7. Jettison;8. General Average and Salvage Charges9. “Both to Blame” Clause 10.Washing overboard;11.Earthquake., volcanic eruption or lightning.12.Entry of sea, lake or river water into vessel, craft, hold, container13.Total loss of any package lost overboard or dropped whilst loading/unloading……14.Any other risk not specifically excluded in the policy or the clausesExclusion extra (Malacious Damage) under B and C
“Deliberate damage to or deliberate destruction of the subject matter insured or any part thereof by the wrongful act of any person or persons.”
CCLLAAUUSSEE
CCCCLLAAUUSSEE
BB
CCLLAAUUSSEE
AA
6 OPG Shipping & Insurance Seminar
Clause 4 General Exclusions Clause
Ordinary wear tear loss in weight, volume etc Willful misconduct of assured Insufficiency or unsuitability of packing or preparation of
subject matter insured Inherent vice or nature Loss damage or expense caused by delay even though the
delay is caused by a peril insured against Loss damage or expense arriving from insolvency or
financial default of the owners or operators etc of the vessel;
Loss damage or expense arising from the use of a weapon of war employing atomic or nuclear fission or fusion and or similar
7 OPG Shipping & Insurance Seminar
UNDERWRITING WISDOM
EACH AND EVERY CARGO – RISK IS A UNIQUE COMBINATION OF INDIVIDUAL RISK FACTORS
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INTEREST / PACKAGING
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VOYAGE
Risk Analysis
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CONVEYANCE
Risk Analysis – I.V.C
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Underwriting Philosophy
UNDERSTAND EXPOSUREInterest Voyage Conveyance
EVALUATE CORRECT
TERMS,
CONDITIONS
CALCULATERATE
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Greater the exposure; Higher the Premium.
If Bad, Bad, Bad no price is high enough
EXAMPLE INTEREST VOYAGE CONVEYANCE
PREMIUM
A GOOD GOOD GOOD
B BAD GOOD GOOD
C BAD BAD GOOD
Risk Analysis – I.V.C
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UNDERWRITING WISDOM
UNDERWRITING IS:90% SELECTION & 10% PRICING
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Case Study 2A Tale of Two Vessels
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Case Study-2A Tale of Two Vessels
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CASE STUDY 3
Insured Name : L&T, India
Cargo : Machinery
Voyage : Hazira, India to Saudi Arabia
Sailing date : 20.07.2004
Conveyance : Tug Husaain Sagar
Value : USD 16,000,000/- (CIF +10%)
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BACK-UP INFO
A REACTOR WEIGHING 800 MT
ON DECK CARGO
DUMB BARGE
TUG USED FOR TOWING
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PROJECT CARGO
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PROJECT CARGO
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UNDERWRITING WISDOM
PRE-SHIPMENT SURVEYS ARE MUCH BETTER THAN POST- LOSS SURVEYS!
INSURANCE SPONSORED DISCHARGE IN PORT PAYS FOR IT-SELF!
21 OPG Shipping & Insurance Seminar
Case Study 4-Auto Exports
22 OPG Shipping & Insurance Seminar
Car Carrier
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Tsunami 26th Dec 2004
24 OPG Shipping & Insurance Seminar
Tricolor
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UNDERWRITING WISDOM
MURPHY’S LAW:
EVERYTHING THAT CAN GO WRONG WILL GO WRONG, AT THE WORST POSSIBLE MOMENT IN TIME.
EXPECT THE UNEXPECTED!
26 OPG Shipping & Insurance Seminar
Case Study 5- Piracy
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Case Study 6 Vessel Sonoma Cargo- DAP Voyage- USA to India Incident- Shortage at
discharge
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UNDERWRITING WISDOM
Recovery – Actionusually against P&I Clubsgenerally pays off!
Average recovery ratio: 20%some reach as high as 40%
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Benchmark No.1 10 + Year Imports
forthe construction of2 Cities in Saudi Arabia
ICC-A Cover Breakeven Rate
0.30%
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Benchmark 2 Bagged Cargo
suffers from expectable, normal loss of 1%
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Benchmark 3 46% of merchant
fleet is over 15 years old
86% of all vessels lost were over 15% of age
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Benchmark 4 70% of all cargo
losses have human error as the ultimate cause.
Only 30% are caused by force majeur
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Benchmark 5
Containers are good but cannot stop-
Theft Sweat On deck losses Stowage losses
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UNDERWRITING WISDOM
TO COMPETE IS IMPORTANT. TO MAKE A PROFIT IS
PARAMOUNT TO SURVIVAL!
35 NIA, PUNE 31st Oct 11
Thank You.