SWINGLEHURST LIMITED. The role of the insurance market in tackling piracy. PAUL AGATE Head of Marine Swinglehurst Limited

Transcription

1 SWINGLEHURST LIMITED The role of the insurance market in tackling piracy PAUL AGATE Head of Marine Swinglehurst Limited

2 Introduction to Swinglehurst Ltd. Founded in 1999 Small, independent Lloyd s broker Offices in 12 countries Focus on niche areas of insurance Marine + Contingency

3 Piracy Marine Insurers view Carried out by groups of individuals acting for personal gain, therefore considered Pirates for Marine insurance purposes. At present little suggestion they acting for a political, religious or ideological motive.

4 Insurance risks Hull & Machinery/Loss of Hire Cargo P&I Charterer s Liabilities Kidnap and Ransom

5 Insurance quandaries! It s complicated!! Variance of market clauses Variance of peril Double insurance? Event management

6 Hull Risks (UK Institute Clauses) Institute Time Clauses Hulls (Clause 280) Includes Piracy (Clause ).but now frequently being transferred back to the H & M War policy by Endorsement.

7 Hull Risks (American Clauses) American Institute Hull Clauses (Clause 7) Includes Piracy as a named peril (Line 71) BUT Excludes Piracy in event of Civil War etc. (Line 245) American Institute Hull War Risks & Strikes Clauses (Clause 87B-108) Includes Piracy BUT Marine insurers retain the right to cancel the policy at any time CONSEQUENTLY Shipowners may purchase separate War risks policy to include Piracy risks

8 Cargo London Clauses: Institute Cargo Clauses (A) Institute Cargo Clauses (B) Institute Cargo Clauses (C) Includes Piracy Excludes Piracy Excludes Piracy American Clauses: American Institute Cargo Clauses 32-B10 Bulk Oil Clauses SP13C Excludes Piracy Excludes Piracy

9 Kidnap & Ransom payments is it recoverable? Ransom payments may be recoverable either through a declaration of General Average, Salvage or a Sue & Labour expense. Shipowners & Hull Underwriters (rather than Cargo or P&I Underwriters) will generally deal with any ransom demand in first instance then seek to recover from other interests. Separate insurance cover may be arranged to cover such payments.

10 Hart announcement Benefits of the HART Swinglehurst cover Significant savings Avoid the extra cost of travelling around the Cape of Good Hope Includes violent theft, piracy and barratry within War Risk cover Preservation of record on existing insurance Cover for Loss of Hire/Earnings Financial elements of K&R included Holistic protection financial and physical

11 Application Form Details of vessel, flag, crew, cargo, speed & freeboard required.

12 Cover Note - specimen

13 Press articles

14 Insurance Premium Rates If starting point for physical damage (hull & machinery) cover is 100, then with Hart Security deployed to protect the vessel the rate would currently reduce to i.e. 35/40% reduction. The bonus then extends to include P & I, Loss of Hire plus full Kidnap & Ransom style Event Management.

15 INSURER RESPONSE TEAM AIG Clayton Consultants Inc. Aspen Re AKE Griffin Underwriting HART Security Asset Protection Jersey (APJ) Henderson Risk Limited Travelers Syndicate 5000 ASI Global Response Hiscox Control Risks Group

16 Vessel is attacked If taken, then the vessel is moved to the pirates controlled port where the crew will either remain on board or taken to camps Call is made to the corporate head office Head office to contact response team Response team send consultant to head office and family of victims if required

17 Response consultant sets up a crisis management team who will be responsible for: All communication with the pirates/hijackers All PR with the media Updating and supporting the families of the victims Decision making about the ransom amount

18 At this stage the response consultant will advise the crisis management team on: What to expect from the pirates/hijackers: Demands Threats Pressure tactics employed

19 The response consultant will also advise the crisis management team on: What to say and what not to say to the pirates/hijackers What to say and what not to say to the media Any local legislation that the company must be aware of Liaise with local law enforcement How to support the families through the entire event How to transport the actual cash to the drop off point

20 Step by step guide miller-insurance.com It is important to note that response teams/consultants will not: Break the law Mount rescue missions Publish client names Act as the spokesperson for the company Participate in face-to-face meetings with kidnappers/pirates

21 Thank you! Any questions?