Quarterly news from the Issue 19 — December 2017

International Union of Marine Insurance

2 Message from the President 12 An introduction to the new Executive

3 IUMI calls for improved firefighting Committee Vice Chair and three new
systems on board container vessels Technical Committee Chairs
4 Report on the meeting of the 13 Cargo Country Report
Sub-Committee on the Carriage of 14 Clearly defined target issues for the
Cargo and Containers Loss Prevention Committee!
5 Implementation of IMO Instruments 15 EU Insurance Distribution Directive
Sub-Committee 17 Cyber Extortion — The growing
6 EU Places of Refuge exercise in threat to maritime business
Norway 18 The industry needs a marine
6 Proper fuel treatment one step investigation code
closer 19 Life Science Shipments
7 TAPA 20th Anniversary Conference 20 People at IUMI: John Miklus
8 2017 IUMI statistics: Marine 21 Address by the Secretary General
insurance markets under pressure, 21 IUMI Asia Forum 2018
but global economy shows some 22 Another year, another successful
signs of recovery annual conference
10 NATO Maritime Security Symposium 22 Imprint
11 IUMI EYE Q&A
With Carien Droppers, Deputy
Secretary General of the Paris MoU
on Port State Control
IUMI EYE December 2017 2

Message
from the President

What a year
2017 has been!

By Dieter Berg
IUMI President

As this year draws to an end it is quite The market environment becoming common practice. As marine
remarkable to look back and see what has insurers we must have a clear focus and
The IUMI Facts & Figures Committee
happened in just one year…. President understanding on the changing supply
reported that the global economy was
Trump’s inauguration, the UK activating chain risks and increasing accumulation
showing signs of recovery after two poor
article 50 to withdraw from the Eurozone, of values on ships and storage. Under-
years which is good news for marine
increasing acts of terrorism all over the writing excellence means intelligently
insurers. However, the increase of
world…the list goes on and on. managing these risks in our books.
protectionist measures worldwide with
The current uneasy political and financial free-trade agreements in danger, and Disruption, innovation & digitalisation
environment is what provoked us to political instability in various regions
Technological innovation and digitali-
choose this year’s annual conference of the world has the potential to cause
sation is going to massively change the
theme “Disruptive times – opportunity or serious disruption.
shipping and logistics industry. E-nav-
threat for marine insurers?”. And it was
Our business is also still under pressure. igation, smart port logistics, intelligent
a hugely successful conference thanks
The international cargo and hull markets containers, blockchain, the Internet of
to our great speakers, hardworking
continue to be in a soft market state. The Things are going to alter our clients’
Technical Committees, the impeccable
offshore energy sector also looks gloomy businesses and their expectations
organisation of the General Insurance
with strong pressure on rates and the towards their insurers.
Association of Japan (GIAJ) and the IUMI
depressed oil price which has led to a
secretariat. Digitalisation will also impact our own
massive reduction in exploration and
business as it will change the existing
Over 500 delegates and 60 speakers and production.
insurance value chain. Marine insurers
panelists descended onto the city of the
In contrast to past years we have seen an are very well positioned to tackle these
rising sun, Tokyo, and discussed innova-
intensive hurricane season with Harvey, challenges if we focus on our competen-
tion, digitalisation, disruption in shipping
Irma, Maria and Nate equally hit marine cies; expertise, service and relationships.
and logistics, as well as other aspects of
insurers. On the basis of various estima- Together with the willingness to promote
society, including politics and technol-
tions, we expect that the total insured innovation and understand the changing
ogies. After three days of fascinating
market loss from these events might expectation of our clients, we will be
presentations, interesting discussions
exceed US$ 100bn. These huge losses ready to turn disruption into opportunity.
and heated debates I believe three main
will have an impact on the insurance
themes emerged relevant to the marine Looking forward to 2018 I am excited to
markets globally not just in the affected
insurance industry. see how the market develops and am
regions.
confident that marine insurance will
There are of course positive signs on the prevail by continuing to offer high quality
horizon with China's Belt and Road initi- services to our clients.
ative which will undoubtedly unlock new
I wish you happy holidays and look
opportunities for marine insurers and an
forward to working with you next year!
upswing in the global economy will push
trade volumes and values.
Technological, legal & regulatory
challenges
With ships growing larger and larger,
new floating offshore technology and the
impact of climate change, government
intervention and stricter regulations are
IUMI EYE December 2017 3

Political Forum

IUMI calls for

improved firefighting
systems on
board container vessels
With the growing size of container In IUMI’s view, fire-fighting systems
vessels, and a recent spate of fires on should allow for segregating the ship
board these ships, IUMI is concerned into fire compartments, where the fire
that current firefighting provisions are can be isolated in order to prevent it from
insufficient and published in September spreading. Systems could then cool
2017 a position paper calling for better on the containers and allow the burning
board fire-fighting systems for container containers to burn out in a controlled
vessels. Recent examples include fires on manner.
By Lars Lange
NNCI Arauco (9,000 TEU) in September
IUMI Secretary General In addition IUMI believes that better
2016 during welding operations
prevention measures can be taken:
whilst alongside in Hamburg, Hanjin
Containers often hold a wide range
Pennsylvania (4,000 TEU) in November
of hazardous and toxic substances
2002 claiming the lives of two crew
and mis-declaration of the containers’
members and resulting in a constructive
content has, in IUMI’s view, a significant
total loss; and MSC Flaminia (6,732TEU)
impact. Although no reliable figures exist,
in July 2012, resulting in three fatalities
IUMI believes that a considerable amount
and also a constructive total loss.
of containers’ content is mis-declared
Whilst IUMI expressly welcomes the and this may lead to insufficient handling
2014 amendment to the International of the containers and can also increase
Convention for the Safety of Life at Sea the danger of combustion of the goods. It
(SOLAS) to increase the effectiveness will also impact on fire-fighting strategy.
of firefighting, the association
Mindful of the increasing size and
believes more should be done. Recent
complexity of modern containerships,
amendments to SOLAS are a move in
IUMI believes that it is necessary for
the right direction but they do not go
further steps to be taken to improve the
far enough. The legal requirements
safety of the crew, the cargo and the
prescribed by SOLAS were originally
ships themselves. IUMI recommends
developed for fires on board general
further discussions with the IMO, flag
cargo vessels and these ships are
states, class and relevant industry
structurally very different to a container
stakeholders on how best to improve fire
vessel; and cargo is stored differently.
detection, protection and fire-fighting
IUMI believes the mode of fire-fighting
capabilities on board container vessels.
set out in SOLAS is not suitable for a
modern containership, particularly as
they continue to grow in size.
For the full position paper
please click here
IUMI EYE December 2017 4

a free surface slurry. This can cause IMDG Code amendments finalised
atypical motion of the ship (wobbling).
The editorial corrections to amendment
The master should take appropriate
38-16 to the International Maritime
action in the event of this possible sign of
Dangerous Goods (IMDG) Code and the
cargo instability.
next set of draft amendment 39-18 (for
The circular includes the draft test adoption in 2018) to the IMDG Code,
procedure for determining the were finalised.
By Nick Gooding FCII transportable moisture limit (TML) for
The draft amendments include new
IUMI Alternate Officer at IMO bauxite; the draft individual schedule for
provisions regarding IMO type 9 tank, a
bauxite of Group A (bulk cargo shipping
set of new abbreviations for segregation
name "BAUXITE FINES"); and draft
groups (SGG), and special provisions for
amendments to the existing individual
carriage of lithium batteries and carriage
schedule for bauxite of Group C (bauxite
of vehicles powered by flammable liquid
with a lower proportion of smaller
or gas.
particles and with a degree of saturation
Report on the by moisture not liable to reach 70 per
cent).
Draft amendments to part A-1

meeting of the Guidance on carriage of ammonium-

of IGF Code agreed
The Sub-Committee agreed draft
Sub-Committee nitrate based fertiliser issued amendments to the International Code
of Safety for Ships using Gases or
on the Carriage The Sub-Committee issued guidance
on carriage of ammonium-nitrate based
other Low-flashpoint Fuels (IGF Code),
relating to protection of the fuel supply
of Cargo and fertiliser (CCC.1/Circ.4), urging extreme
care when handling and carrying the
for liquefied gas fuel tanks, aimed at
preventing explosions.
Containers fertiliser in bulk.
The warning follows accidents involving Safety provisions for ships using
the Purple Beach (2015) and Cheshire fuel cells developed
(2017). While the investigation reports
Further progress was made in developing
are still pending, the Sub-Committee
The meeting of the Sub-Committee on safety provisions for ships using fuel
agreed on the need to raise awareness of
the Carriage of Cargo and Containers cells, including the proposed new part
potential problems.
took place 11–15 September 2017. The E on fuel cell power installations to IGF
key matters of interest are as follows: During the incidents, the gas clouds code. Part E would cover installation, fire
produced were large enough to envelop safety and other relevant matters.
Bauxite carriage alert issued the ship, and cover the sea area
surrounding the ship. The vapour emitted Unified interpretations agreed
The Sub-Committee raised awareness on
was highly toxic. Such conditions could
the potential risks posed by moisture and The Sub-Committee agreed unified
affect the safe abandonment of the ship
provided new guidance on carriage of interpretations to the IGF Code and the
and hinder rescue and firefighting efforts.
bauxite, in the form of a circular aimed at International Code of the Construction
shippers, terminal operators, shipowners, In such events, cargo decomposition and Equipment of Ships Carrying
ship operators, charterers, shipmasters may last for multiple days and the Liquefied Gases in Bulk (IGC Code)
and all other entities concerned.
The temperatures in cargo holds may reach in relating to testing of high-level alarms
circular requests that extreme care and excess of 500˚C. and level indicator in the bilge well of
appropriate action be taken, taking into tank connection spaces of independent
The Circular notes that the best
account the provisions of relevant IMO liquefied gas storage tanks.
protection for seafarers is awareness of
instruments, when handling and carrying
the decomposition process to allow it to
bauxite in bulk. High manganese austenitic
be identified at an early stage. Regular
steel work continued
The circular takes immediate effect, monitoring of the cargo throughout the
ahead of the next scheduled adoption voyage is crucial to detect the start of Work continued on discussing the
(in 2019) of the new test methods and decomposition. suitability of high manganese austenitic
relevant schedules for bauxite cargoes steel for cryogenic service, and it
during the routine scheduled updating IMSBC Code amendments developed was agreed that that draft Interim
of the International Maritime Solid Bulk guidelines for the application of
The Sub-Committee continued its regular
Cargoes (IMSBC) Code. The IMSBC Code high manganese austenitic steel for
work to update the IMSBC Code. The
is the industry rulebook on how to deal cryogenic service should be developed.
next set of IMSBC Code amendments
with bulk cargoes. The correspondence group was
will be a consolidated version which is
re-established.
The CCC.1 circular updates a previous expected to be prepared by the Editorial
circular on carriage of bauxite and invites and Technical Group (E&T 29, meeting High manganese austenitic steel is a
Governments to note that some bauxite spring of 2018) and subsequently material that has been proposed as being
cargoes (specifically those with a larger adopted by MSC 101 in 2019. suitable for use in cryogenic applications
proportion of smaller particles) present such as cargo tanks, fuel tanks and piping
a risk caused by moisture and should of LNG carriers and LNG-fueled ships.
be treated as Group A cargoes. Excess
moisture in such cargoes can lead to
IUMI EYE December 2017 5

By Nick Gooding FCII Lessons learnt and safety issues 2. agreed a draft revision of resolution
IUMI Alternate Officer at IMO identified from the analysis of marine A.1053(27) on the Procedures for Port
safety investigation reports State Control 2011, with a view to future
adoption;
Upon receipt of WG1's report, the
sub-committee approved it in general, 3. agreed draft text for the action to
and in particular: be taken by Port States on the required
update of Electronic Chart Display and
1. approved changes to the text of
Information System.
casualty analysis for release to the
public on the Global Integrated Shipping
Updated survey guidelines under
Integrated System (GISIS) Marine Casual-
HSSC, non-exhaustive list of obliga-
ties and Incidents module;
tions and review of administration/
2. agreed bringing observations ROs model agreement
regarding the quality of marine investiga-
The Drafting Group following terms of
tion reports to the attention of Adminis-
Implementation trations by means of a circular;
reference produced a detailed report
for the Sub-Committee’s approval. In

of IMO 3. approved draft text of Lessons Learnt

from Marine Casualties and their release
particular, the Sub-Committee:
1. agreed to a new draft survey item
Instruments on the IMO website;
4. invited the HTW sub-committee to
to address the instruction of MEPC 71
introducing provisions for validating the
Sub-Committee advise Member States that they should
make use of the report on GISIS Mass
compliance of individual Ballast Water
Management Systems, with the appli-
Casualty Incident module for the benefit cable regulation of the BWM convention
of seafarer’s education and training; at the commissioning stage;
5. noted that the current casualty 2. endorsed DG1s view that this should
analysis procedure will remain in force not apply to vessels which have already
until the new one is duly endorsed by the been subject to an initial survey prior
sub-committee; to the entry into force of the proposed
The IMO Sub-Committee on Implemen- guidelines;
6. noted the outcome in IACS’ review
tation of IMO Instruments held its 4th
using data from GISIS Ship and Company 3. invited MEPC to consider whether
Session from 25 - 29 September 2017.
Particulars and Mass Casualty Incident detailed aspects regarding validation
The following groups met during the
modules for conducting FSA Studies. compliance of individual BWMS with
meeting.
regulation D-2 of the BWMC in conjunc-
Working Group 1 (WG1) Measures to harmonise Port State tion with their commissioning need to be
Discussed lessons learnt and safety Control (PSC) activities and procedures addressed;
issues identified from the analysis of worldwide
4. invited MEPC to consider whether
marine safety investigation reports.
A wide-ranging discussion took place a review of the Survey Guidelines under
Working Group 2 (WG2) in Plenary covering items such as: the the HSSC in relation to the BWMC may be
Looked at measures to harmonise report of the correspondence group required in light of the 2016 Guidelines
Port State Control (PSC) activities and set up by III 3; guidelines for Port State (G8);
procedures worldwide, and identified Control officers on certification of
issues relating to the implementation of seafarers hours of rest and manning; Outcome of the third session of the
IMO instruments from the analysis of Port guidance on provision of documentary joint FAO/IMO ad hoc Working Group
State Control data. evidence required under the Standard of on Illegal, Unreported and Unregulated
Training Certification and Watchkeeping (IUU) fishing and related matters
Drafting Group 1 (DG1)
(STCW) Convention; fire integrity of
Looked at Survey Guidelines under the Following a discussion in Plenary, a Joint
certain bulkheads; performance of Flag
Harmonised System of Survey and Certi- Working Group, on the recommendations
Administrations and ROs; transparency
fication (HSSC) of the third session of the Joint FAO/IMO
and harmonisation of PSC information
Ad Hoc Working Group on IUU Fishing
Joint Working Group (JWG) as well as the analysis of PSC activities,
and Related Matters, was set up and
Studied the recommendations of the practices and statistics.
various recommendations were made to
third session of the Joint Food and
Following discussion in Plenary WG2 was the meeting which were carried forward.
Agriculture Organisation of the United
established and set to work. The Group
Nations/IMO Ad Hoc Working Group on
submitted its report which was generally
illegal unreported and fishing and related
approved by the sub-committee, and in
matters
particular:
The main outcomes are reported
1. approved text intended to provide
below.
Port State Control officers with clear
guidance and agreed to the revised
text of the draft Guidelines for Port
State Control officers on certification of
seafarers, manning and hours of rest;
IUMI EYE December 2017 6

Political forum
EU Places of Proper fuel
Refuge exercise treatment one
in Norway step closer
History has taught us that written guide- The International Maritime Organiza-
lines may not always be enough when tion’s (IMO) 0.5 per cent global sulphur
faced with a real situation of a vessel in fuel limit will come into force in 2020.
distress. When IUMI welcomed the new Heavy fuel oil is already restricted in
EU operational guidelines for places of Emission Control Areas (ECAs), and new
refuge in January 2016, we also stressed low-sulphur fuels are entering the market.
that the true success will be demon-
Marine insurers have for some years
strated as actual incidents occur. Fortu-
By Helle Hammer raised their concerns over the discrep-
nately, they are not too many. Exercises
Managing Director of Cefor and ancy that exists between the ISO fuel
therefore become necessary for Member
Chair of the IUMI Political Forum standard for cat fine content in fuel,
States to familiarise themselves with
and the content recommended and
proper procedures and the tools available
anticipated by manufacturers in engine
to them.
design. Machinery damage is the most
The European Maritime Safety Agency frequent claims cause in marine insur-
(EMSA) organised, together with the ance, and cat fines is the most typical
Norwegian Coastal Administration, and well-known contaminant that can
a table top exercise on the Operation destroy an engine without effective filtra-
Guidelines in Horten, Norway, 27–28 tion, purification and fuel management
September. The exercise was held in on board. Cat fines is a by-product of
conjunction with a larger live exercise refining, and increases with low sulphur
on pollution response in Skagerak fuels that require more refining.
(SCOPE). The exercise was well attended
IUMI first raised this issue with the
by Member States and observers repre-
International Association of Classifi-
senting amongst others salvors, P&I and
cation Societies (IACS) in 2011, and
hull insurers (including IUMI), and played
representatives of IUMI met with the
out a scenario in which communication
IACS Machinery Panel in 2013 to present
tools and coordination among the co-or-
our concerns. Following this meeting
dinating and supporting Member States
a project team was established within
were key elements.
IACS, and in July 2017 Recommendation
Through plenary and workshop discus- 151 for petroleum fuel treatment systems
sions it was clearly explained how for marine diesel engines was published.
insurers can respond and what lies within
The IACS Recommendation aims to
the scope of P&I and H&M respectively
Places of Refuge exercise in Norway improve the operational safety of the
in these situations. Several tools and
27–28 September 2017 vessel, and addresses many of the
information sources are now available
concerns raised by IUMI. The require-
to assist coastal states when dealing
ments cover the complete fuel treatment
with an incident. This will allow for better
system from bunker fuel connection
advised and quicker decision making
through to the interface with the oil
NORWAY based on a proper assessment of each
fuelled machinery; this includes fuel
situation. As stated in the guidelines,
tanks, the fuel cleaning equipment and
there shall be no denial of access to a
the fuel condition equipment.
Horten place of refuge on anything (commercial
or financial) other than safety grounds. A few classification societies already
have requirements in place for the
The operational guidelines will be
handling of fuel; DNV GL, RINA and the
Skagerak updated based on lessons learned, and a
Indian Register of Shipping. However, a
fourth version was published in January
more unified comprehensive approach
2017. IUMI has been involved as one of
through the IACS recommendation
the industry stakeholders in the devel-
is clearly needed. For Recommenda-
opment of the guidelines, and strongly
tion 151 to become effective, IUMI
supports their implementation and global
encourages implementation by all IACS
application.
DENMARK members and will monitor its adoption.
IUMI EYE December 2017 7

Political forum Image: Transported Asset Protection Association

TAPA 20th Anniversary

Conference

The 20th Transported Asset Protection Nik Gowing, from “Think the Unthink-
Association’s (TAPA) global anniversary able”, stressed that “big data is the oil of
conference took its participants on a the future” and that it will likely shape the
journey looking into the future of the 21st century as oil did in the 20th century.
supply chain. With over 500 delegates A challenge noted by one logistics
attending on 25–26 October in London, provider was the size of their datasets,
participants included supply chain which in principle was considered a good
security experts and security technology starting point. They would, however, only
By David Taylor
firms, as well as government officials, make it available if other companies were
Europe & International Marine
insurers and surveyors. to join and contribute their data. If there
Director at RSA and
are not sufficient contributors, data could
Chair of the IUMI Loss Prevention The conference programme was
be easily traced back to the initial data
Committee designed to go beyond the “here and
provider. Coalition building is therefore
now” of the realities of cargo crime and
crucial in order to successfully mine
cargo theft, and instead look at potential
the data sets. A logical consequence to
changes, trends and disruptions to the
the increasing importance of big data
supply chain likely to arise in the (near)
was reflected in the hiring of more data
future. New technologies such as drones,
analysts and mathematicians by certain
autonomous vehicles and robots were
logistics firms.
not only discussed but also demon-
strated with live demonstrations. For IUMI and its members the challenge
behind collecting data is twofold; firstly,
I was invited back to speak, on behalf
we must ensure that we collect and use
of IUMI, for the second time at a TAPA
the optimal data, and secondly, to find
event. In my presentation I discussed
a way to consistently capture data in a
the rapidly changing challenges facing
sufficiently consistent and optimal way
insurers in the 21st century. I empha-
across our markets that can be used
sised that seven drivers of change will
and leveraged as an asset with industry
make a significant impact on insurers’
partners and our customers. Insurers
business models as we know them today:
have the potential to assist industry
financial and insurance, environmental,
stakeholders by combining and sharing
globalisation, socio-economic, legal and
data - particularly on losses generally and
regulatory, technological, and geopolit-
theft specifically – with data from poten-
ical factors.
tially hundreds of thousands of clients.
A recurring message throughout Insurers’ value in the future is dependent
the conference was the importance upon our specialist expertise and data, as
of collecting better data, making it well as our capacity.
accessible and maximising the value
derived from it. This was noted by several
speakers who explained that they had
huge data sets available but hadn’t found
a suitable method yet on how to utilise
them.
IUMI EYE December 2017 8

2017 IUMI statistics:

Marine insurance
markets under pressure, By Astrid Seltmann
Analyst/Actuary of the Nordic

but global economy Association of Marine Insurers (Cefor)

and Vice Chair of the
IUMI Facts & Figures Committee

shows some signs of

recovery

At the 2017 IUMI conference in Tokyo, Shipping and offshore energy markets relative strong impact in 2015. The
the Facts and Figures (F&F) Committee principal trend in recent years is towards
Both the shipping and offshore energy
set the scene on the Monday morning a higher cost of single losses and an
markets were challenging in 2016. In
for the subsequent workshops with its increased volatility in the occurrence
2017, there are small signs of improve-
annual update on the macroeconomic and cost of such claims. As a result, the
ment such as within the bulker market
environment and shipping market volatility in annual insurance results also
and the moderate increase in the oil
(Donald Harrell, Chair) and the global increases, depending on the (non-)occur-
price. It remains to be seen if the recovery
marine insurance market (Astrid rence of major losses. In combination
continues and what effect this will have
Seltmann, Vice Chair). with deteriorating premium levels, this
on the marine insurance market.
makes achieving sustainable results an
The third speaker, Stephen Gordon, CEO
ongoing challenge.
of Clarksons Research, rounded off the The global marine insurance market
F&F session with an excellent update on In the offshore energy sector, the lack
Premiums
the market conditions for shipping, trade of activity resulted in a relative benign
There has been a downward trend in
and offshore energy. claims environment in recent years.
marine underwriting premiums in all lines
However, with many offshore assets in
of business. While the strong US dollar
Facts & Figures Committee work lay-up, a current concern is potential
contributes to this, when comparing it
claims and their prevention once the
The core of the committee’s work to other currencies, the general weak
reactivation of complex offshore units
remains the production of the well-es- market conditions play a role in terms of
begins on a larger scale.
tablished extensive annual statistics, the global economy, commodity prices,
published each spring and autumn. In and the poor state of the shipping and Values
addition, the committee is working on offshore sectors. Increasing value accumulation (ports,
establishing a major claims database larger high-value vessels) and conse-
Technical results
providing data on carriers’ and marine quently increased potential for new
The 2015 underwriting year results
liabilities, exploring new opportunities by record claims continues to be a major
deteriorated in all lines of business,
strengthening its partnership with estab- concern (2012: Costa Concordia, Hurri-
influenced by major loss events such as
lished and new data providers; extending cane Sandy, 2015: Tianjin explosions,
the Tianjin explosions and the AMOS-6
its global and local reach by securing a 2017 hurricanes/typhoons). On a single-
satellite, the full effect of which was
broad spread of knowledge within the risk basis, ship values were deteriorating
not known a year ago. For 2017, the
committee in terms of geography and in recent years, and particularly for the
Caribbean hurricanes and Pacific
specific areas of competence. bulk and supply/offshore sector. While
typhoons are expected to impact 2016
the bulk sector started to recover in 2017,
and 2017 results negatively.
Economy and Trade values continued to drop in the offshore
Claims sector.
The global economy is generally
The cargo sector has been hit signifi-
improving and shows a recent positive In general, the 2017 market environment
cantly in recent years by natural catastro-
trend. However, with many factors remains challenging, with difficult market
phes such as the Sandy storm and floods,
impacting global economy and trade, conditions and the prevailing overca-
as well as man-made events such as
there is still a considerable amount of pacity in all marine insurance lines.
the Tianjin explosions and the AMOS-6
uncertainty as to how Brexit, a change in Changes in regulation, environment and
satellite claim. In 2017, there have been
national trading policies, financial uncer- technology are further influencing and
various severe hurricanes and typhoons.
tainties or ongoing conflicts in various changing the industry.
parts of the world, will influence the In the hull sector, the impact of major
future macroeconomic development. losses was moderate in 2016 after a
IUMI EYE December 2017 9

2017 IUMI statistics: Marine insurance

Cargo Premium versus World Trade
markets under pressure, but global
Values and Exports
economy shows some signs of recovery
Continued

For more insight please look at the

Hull Premium / World Fleet
Facts and Figures conference publica-
tions published here:

Facts & Figures press release

Report on Merchant fleet and world trade

(Donald Harrell)
PDF Download

Global Marine Insurance Report

(Astrid Seltmann)
PDF Download

Tables with marine premiums by country

and loss ratio triangulations for cargo,
hull and offshore insurance are available
for IUMI members

Offshore Energy Premium

Shipping & Trade, Offshore & Energy — Energy mobiles, day rates oil price
a Market Outlook (Stephen Gordon)
PDF Download

In addition to the conference presenta-

tions, the Facts and Figures Committee
provides the marine insurance industry
with extensive up-to-date key indicators
published in spring and autumn each
year, which IUMI members can download
from :

https://iumi.com/statistics
IUMI EYE December 2017 10

Political forum

NATO Maritime Security

Symposium

On 4 October 2017, NATO’s Allied With regard to terrorism and smuggling

Maritime Command (MARCOM) invited it was noted that information sharing
approximately 25 maritime industry between the industry and military would
representatives, including IUMI, to be beneficial. Ideally, information would
engage in an exchange with military flow both ways, i.e. NATO share briefings
representatives from various NATO with merchant carriers and vice versa.
divisions at the NATO base in Northwood, Industry stakeholders emphasised the
UK. The purpose of the symposium importance of coordinating reporting
By Hendrike Kühl
was to continue dialogue between the requests as there was already a huge
IUMI Policy Director
shipping industry and MARCOM, and regulatory obligation on crews to report
to develop a concrete roadmap with various sets of data.
specific steps to leverage this business/
As for piracy, the discussion showed that
military cooperation.
in the Gulf of Aden approximately 40% of
The agenda covered four key issues: vessels had armed guards on board. In
Asia restrictions for armed guards were
1. Cyber threats and cyber defence
put into place by littoral states. The NATO
2. Illegal immigration and mitigation briefings provided during the symposium
measures were very helpful. Reporting require-
ments for piracy incidents from merchant
3. Terrorism and smuggling
ships need to be streamlined, i.e. only
4. Piracy and global BMP one organisation to report to. Illegal,
unregulated and unreported (IUU) fishing
Phil Tinsley, of BIMCO, presented about
was named as one factor leading to new
cyber threats onboard ships, discussing
piracy incidents in Somalia and the Gulf
the industry cyber guidelines and specif-
of Guinea.
ically referred to the new section about
insurance. In the discussion that followed MARCOM will continue to host these
an overriding issue was identified by all meetings annually and IUMI will continue
stakeholders; the problem of missing to attend.
data. Reliable data is difficult to come by
For more information
due to the reluctance of corporations to
please click here:
share information about cyber incidents.
The transparency and openness of
Maersk in its dealing with the ‘NotPetya’
http://www.shipping.nato.int/nsc.aspx
cyber-attack was considered extremely
helpful. An additional key point raised
was the importance for seafarers to
retain the ability to navigate with the use
of paper charts in order avoid complete
reliance on ECDIS and other software
systems.
IUMI EYE December 2017 11

IUMI EYE With Carien Droppers,

Q&A Deputy Secretary
General of the Paris MoU
on Port State Control

We train our people to be prepared for the Is there anything you would like
new requirements when a new conven- to see marine underwriters do
tion comes into force and by stopping this differently or better?
at the last moment, or being asked to do it
The marine insurance market could
differently, creates a real challenge.
focus more on targeted vessels/under-
Does Paris MoU offer anything specific performing ships. Targeted vessels
for marine insurers? are ships banned from operating in a
region or are on a watch list for a certain
All our inspection related data is freely
region. Usually these ships are under
accessible through our public website
certain poorer performing flag states and
for marine insurers to access informa-
recognised organizations. By focusing
tion about a vessel or a fleet. This data
on these ships e.g. by increasing the risk
provides an overview of inspections and
and premiums for these vessels, marine
detentions.
insurance can assist in the common
We also provide calculators to assist with goal of eliminating substandard ships by
the calculation of company profiles and strengthening the circle of responsibility.
ship risk profiles which may be of added
If you could wave a magic wand and
value to insurers. We use these calcula-
change just one thing in the shipping
tors purely for targeting purposes, as they
industry, what would it be?
are not a quality indicator, but many in the
industry value this tool. I would ensure that all seafarers be
adequately trained, paid and have decent
How do Paris MoU and IUMI work
In a nutshell, how would you describe working and living conditions on board a
together?
the Paris MoU? ship. In my view a happy crew equates to
We regularly communicate and will a content, well run and safe ship, and it is
We are an umbrella technical body
contact each other when there is important to remember that the crew is
comprising of 27 maritime states which
something of interest. In 2016 I was the essence.
are members of Paris MoU Port State
asked to deliver a webinar for IUMI
Control. This forms an effective control If you were not in your current role
on Port State Control. I am happy to
mechanism to enhance the safety of what would be your ideal job?
be invited to participate in other IUMI
shipping, the protection of the marine
webinars, we have a good cooperation My dream job would be to contribute
environment and the working and living
with open channels. effectively to a more sustainable future
conditions on board ships; eliminating
for the next generation and to leave a
substandard shipping in the region. Do you have a view on the current state
better world for those that come next.
of the marine insurance market?
What is the biggest challenge facing
What do you like doing when not
Paris MoU today? From a Port State Control perspective, I
working?
believe it is working well. In the instances
The biggest challenge is rapidly changing
when ships have been damaged during a I enjoy travelling abroad, spend my
international legislation. This is of
voyage or when coming into port it must leisure time on board a sailing yacht with
particular concern when international
be reported to the PSC, but if the damage my husband and son, reading, riding my
bodies, such as the International
is reported using adequate reporting bicycle and enjoying family life.
Maritime Organization (IMO), call upon
channels – such as to their flag state and
Port State Control Officers (PSCOs) to Anything else you’d like to add?
recognised organisation - we take this
deviate from their duties under new
into account and will not detain on these The cooperation between the nine
mandatory requirements, such as those
damages. regional PSC agreements and US coast-
for ECDIS and Ballast Water Manage-
guard collectively, as well as with the IMO
ment, and then at the last moment take
and ILO is very valuable. It is a necessity
a step back when member states and/or
if we wish to eliminate substandard ships
the industry realise they are not ready.
globally by preventing these substandard
ships to escape to other regions continue
to trade.
IUMI EYE December 2017 12

New IUMI Members

An introduction to the new
Executive Committee Vice Chair
and three new Technical Committee
Chairs

During the IUMI annual confer-

ence in Tokyo this year, Takeshi
Miyazaki was elected as a new
vice chair of the IUMI Executive
Committee. Shuichi Terakawa
(Steve) has stepped down
following a change in his role at Takeshi Miyazaki Sean Dalton, CPCU, AMIN
Tokio Marine and Nichido Fire Takeshi is no stranger to marine insur- A graduate of the United States Merchant
Insurance Co. Ltd. ance having spent his entire career – over Marine Academy at Kings Point, with a
30 years - in the industry. Following Master’s degree from State University of
This year also saw the election his graduation from university in 1986, New York Maritime College, Sean served
of three new Technical Takeshi began his career as an Assistant as a Lieutenant for the United States
Committee chairs; Sean Dalton Underwriter of War Risks in the Hull Navy Reserve from 1988-1999. Following
Underwriting Department of Tokio this Sean moved to marine insurance
(Cargo Technical Committee), Marine & Fire Insurance before moving and has held various roles, notably from
Anneke Kooiman (Inland to London for several years as the first 2010 to 2014, Sean was EVP and Head
Hull, Fishing & Yacht) and marine hull representative for Tokio of Marine for Zurich Global Corporate
James McDonald (Offshore Marine. in North America, leading the Global
Corporate Marine business unit in profit-
Energy Committee) after Nick Over the years Takeshi has worked hard
ably growing their ocean and mono-line
Derrick, Michael Csorba and and built his career, working in most
inland marine lines of business.
sectors of marine insurance including
Simon Williams, respectively, hull and upstream energy, and is now Currently Sean is the Head of Marine
completed their set terms – General Manager of the Marine Under- Underwriting, North America for Munich
thank you all for your hard work writing Department and Head of Marine Re America, he leads the marine reinsur-
and dedication. for Tokio Marine & Nichido Fire Insur- ance team responsible for marine in the
ance. Takeshi also holds the position of US and Canada. Sean also serves on
Chairman of the Underwriting Committee the Board of Directors for the American
for the Hull Reinsurance Pool of Japan. Institute of Marine Underwriters (AIMU)
and is a member of the National Cargo
Following his election, Takeshi
Bureau (NCB) and American Bureau of
commented:
Shipping (ABS).
“It is a great honour to be joining the
Executive Committee of such an
historical and professional organisation.
During these disruptive times, when our
marine business is drastically changing,
I look forward to working on various key
issues of interest to marine insurers with
the Technical Committees and taking on
this new challenge to help IUMI enhance
its presence in the global market, particu-
larly in the region of Asia.”
IUMI EYE December 2017 13

Cargo
New IUMI Members
Continued

Country
Report

By Sean Dalton, Head of Marine

Underwriting NA, Munich Reinsurance
America, Inc., and Chair of the IUMI
Cargo Technical Committee

Anneke Kooiman James McDonald While under the leadership of prior

chairs including former Chairman Nick
Beginning her career in 1976 as a Following a degree in Biochemical Derrick, the IUMI Cargo Committee
marine underwriter for Delta Lloyd, Engineering at UCL, James started his has developed a Country Report with
Anneke was the first female marine career in insurance in 1985, on the dark content submissions from the committee
underwriter in the Dutch market. Anneke side, working as a broker at Sedgwick members. This initiative started in prior
is still working for Delta Lloyd and now Offshore Resources. He transferred to years and has evolved and improved.
holds the position of Marine Manager. New York in 1990 to run the marine and
Impressively, Anneke has won several energy desk at Sedgwick international Earlier in 2017 work was undertaken
insurance awards including the Jurrian Marketing Services (SIMS). Finally, in to improve the format of the report and
Award which is awarded to a professional 1998 he saw the light and moved across implement a consistent approach for
who consistently and prodigiously serves to the underwriting fraternity, relocating sourcing content so that the report could
the field of (transport) insurance law by back to London as the energy underwriter be shared more broadly within IUMI.
Codex Mulder (Amsterdam based law for Goshawk Syndicate in Lloyd’s. A working group comprising Nicole
firm specialising in international trade, Pousson, Isabelle Therrien, Mikaela
After a brief stint at the Cotesworth Syndi- Tamm, Nick Derrick, and Sean Dalton
transport, logistics, insurance and liability
cate, James joined post-9/11 start-up implemented changes that included a
matters).
Talbot Underwriting Limited as their standard outline for content, sourcing
Anneke also founded, and held the upstream energy underwriter. In 2010, guidelines, and development of a suitable
position of chair for nearly 20 years, of James was promoted to Head of Marine, legal statement on content.
the Dutch marine insurers discussion responsible for Hull, Cargo, Yachts,
group called Marine Insurance Associ- Fine Art & specie and Marine & Energy The resulting work produced an
ates. During her career so far, Anneke Liability in addition to Upstream Energy. improved IUMI Cargo Committee
has held various positions within the James is a Chartered Insurer and has Country Report that is available to the
industry including being a member of attended every IUMI conference since IUMI membership from the website with
the Marine Insurance Examination Board 2004, and been involved in the Offshore the appropriate ID and password:
for nearly 15 years and was a member of Energy Committee for four years. James
the Liability Committee, Hull Committee is also a long-standing member of the
and Cargo Committee for the Dutch Joint Rig Committee in London. https://iumi.com/committees/
Association of Insurers. For the past few cargo-committee
James’ passion is music and he has
years Anneke holds the position of chair The IUMI Cargo Committee encourages
recently secured a guest slot as a DJ on
for the marine platform of the Dutch you to review the report. If you have any
WIOX radio station in New York.
Association of Insurers and represents questions please direct them to the
the Netherlands as a Council Member Committee Secretary, Mikaela Tamm.
within IUMI. Anneke has a strong interest
in sustainability and tries to contribute as
much as possible through her work for a [email protected]
more sustainable future.
IUMI EYE December 2017 14

Clearly defined target issues

for the Loss Prevention Committee!

Packaging must protect what is inside In the context of transporting goods,

from the stresses that arise in transit. humidity management is an essential
The stresses experienced by the cargo part of quality management. The term
vary greatly depending on whether the “cargo loss due to condensation” is used
consignment is transported purely by as a blanket term for damage caused by
road or as an intermodal operation by the fact that the moisture content of the
road, rail and sea, with all the associated cargo was too high. The consequences
transhipment activities. The logical can include collapsing packaging, mold,
By Uwe-Peter Schieder, Liability,
consequence of this is that the packaging fermentation and corrosion. The Loss
Credit, Marine & Aviation Insurance,
must be designed to withstand the Prevention Committee's statement on
Statistics, GDV, and member
expected stresses. If the journey is short humidity management, which is a useful
of the IUMI Loss Prevention Committee
and no transshipment is necessary, a supplement to Annex 3 of the CTU Code,
truck tarpaulin may be sufficient protec- provides all those involved with transport
tion. operations with a practical tool to assist
in quality assurance activities.
The term FFPP has been coined by the
To begin, the Loss Prevention Committee
Loss Prevention Committee to describe Standards and statements help to
has addressed two specific issues
packaging that takes account of the identify risks and assess them correctly
relating to quality management;
risks associated with the demands of and identify hazards. They provide clear
packaging and humidity management.
the journey in question – fit-for-purpose guidelines for the expected stresses and
Transport insurers assume the risks packaging. If packaging is FFP, it is hazards and help to prevent loss. But
of their customers, whose goods are commensurate with the risks and is able they also protect against uneconomic
transported, stored and transhipped to fulfill its function. The magnitude of securing and quality management
worldwide, by land and sea, until they the loads to be expected is specified, measures that overshoot the target.
reach their destination. This is a range for example, in the Cargo Transit Unit
Please click here for the Loss Prevention
of risks that is only covered on this scale (CTU) Code and many other national and
Committee technical papers:
by transport insurers. It pretty well goes international standards. This ensures
without saying that such risks can only be that there is no pointless “excessive
assumed under certain conditions. The packaging”.
https://iumi.com/education/
load must be capable of withstanding
education-database/technical-pa-
the intended transport operation. This
pers-and-guidelines
includes protecting the cargo against
external influences, as well as proper
conditioning of the cargo itself.

Liaison Office:
Dakar, Senegal
International Marine + Cargo Surveyors
NEW local office: available at 572 locations all over the world
Abidjan, Ivory Coast
www.globalmarine.expert
www.dpsafrica.com

IUMI EYE December 2017 15

EU Insurance
Distribution Directive

By Mike Roderick
Partner
Clyde & Co.
IUMI Professional Partner
www.clydeco.com

Introduction 2. There is a much enhanced pricing

transparency requirement. Intermedi-
EU Directive 2016 (97) of 20 January
aries have to state the nature of their
2016 on insurance distribution (the
remuneration - although there is no
Insurance Distribution Directive or IDD)
obligation to disclose the level of the
sets out a new and enhanced European
remuneration itself. Whatever the nature
legal framework for insurance (and
of the remuneration arrangement it must
reinsurance) distribution applicable to
not be in conflict with the obligation to
risks inside the EU. Since publication
ensure appropriate insurance coverage
it has been supplemented by two
for the customer. Implementation of
further Delegated Regulations from the
this requirement is proving particularly
European Commission, C(2017) 6218
controversial in a number of Member
and 6229, which are directly applicable in
States e.g. in Germany there has been
Member States.
intense legislative discussion about
Key aims of the IDD are to afford greater a provision that would prohibit broker
protection to customers and to further remuneration other than by way of Delayed entry into force
harmonise insurance and reinsurance payments from insurers with no fee to
These changes are both significant and
distribution. be charged to the insured, a provision
complex. In the UK alone, the FCA has
that was ultimately defeated at a recent
Impact on marine insurers published three lengthy Consultation
Parliamentary session.
Papers on implementation of the IDD.
The following changes are of particular
3. There are new rules on product The changes will impose significant
importance for marine insurers:
review – insurers and intermediaries additional burdens on insurers. Certainly
1. To ensure a level playing field for that design new or significantly amend their impact on insurance distributors
customers whatever the distribution existing products must have an internal such as freight forwarders is not yet fully
channel used, the IDD widens the scope and thorough Product Oversight and appreciated within the industry.
of existing regulation beyond interme- Governance (POG) process in place to
The IDD is set to enter into force on 23
diaries such as brokers and agents (e.g. ensure that products are and remain
February 2018. In recognition of the
managing general agents with delegated suitable for their target market. This
complexities involved and to allow the
underwriting and claims authority) to all requirement therefore applies both
insurance industry sufficient time to
sellers of insurance products e.g. yacht before products are first marketed and
properly implement the changes required
chartering companies, freight forwarders on an ongoing basis. These new rules
the European Commission has been
and removal companies, which sell insur- do not, however, apply to large risks, as
requested to delay entry into force. At
ance directly to their customers as part of defined in Directive 2009/138/EC - that
the time of writing we anticipate that a
a wider package. definition includes loss or damage to
postponement to 1 October 2018 will be
ships and to goods in transit.
granted but no extension has as yet been
4. Member States are to ensure that officially confirmed.
insurance distributors are under a duty
I am grateful to my colleague, Dr Kathrin
always to act in the best interests of their
Feldmann, in our Düsseldorf office for her
customers, to ensure that their remuner-
assistance with this article.
ation arrangements do not conflict with
that duty, to ensure that customers
receive clear and fair information about
the product being sold and that distribu-
tors are properly trained and qualified.
IUMI EYE December 2017 16

Cyber Extortion —
The growing threat to maritime
business
By Matthew Montgomery,
Senior Associate, and
Joseph Malpas, Trainee Solicitor
HFW
IUMI Professional Partner
www.hfw.com

Cyber security has become an important The “business model” for these cyber
management issue for shipowners. In criminals appears to involve demanding
this article we focus particularly on cyber relatively modest ransoms in order to
extortion, which we have identified as a restore normal services and/or refrain
growing threat to the shipping industry. from leaking sensitive data. Faced with
the choice between paying a small
Cyber extortion can take various forms.
ransom and losing precious data and/
One of the better publicised attack
or business income, it is understandable
vectors is ransomware, which is a type
why some businesses would pay the
of malware that can infect a computer
ransom. Indeed, ransom payments
system and encrypt data until a ransom
resulting from cyber extortion are under-
is paid, often in the form of a “cryptocur-
stood to be one of the fastest growing
rency” such as Bitcoin. A high-profile
areas of cyber insurance claims.
example of a ransomware attack was the
recent “WannaCry” virus which severely Cyber insurance policies often cover
impacted a number of UK state health cyber extortion, including the payment of
bodies that had failed to implement a ransom demand. Generally speaking,
software updates. the payment of a ransom is neither
unlawful or contrary to public policy as
Another form of cyber extortion may
a matter of English law. However, these
involve threats to release, disseminate or
are complex legal issues which need a
destroy data obtained by some form of
careful consideration of the facts.
unauthorised access. Once confidential
data has been extricated, cyber criminals Cyber extortion seems to be a growing
may demand a ransom in order to release risk which the insurance market is
it. This kind of attack may not involve any responding to. However the legal
sort of malware, so systems often remain complexities of dealing with a cyber
operational during and after the breach. extortion event require careful considera-
However, if the ransom demand is not tion on a case by case basis.
met then malware or a DDoS attack may
follow.
IUMI EYE December 2017 17

Liquefaction leads
to yet more loss of life
and total losses
By Faz Peermohamed
Global Head of Shipping
Ince & Co LLP
IUMI Professional Partner
www.incelaw.com

The recent loss of Emerald Star in Recovery of Losses

September this year, with the loss of
In the event of a casualty, obtaining legal
another 10 seafarers lives, and the
advice on these issues from the outset
sinking of the Bulk Jupiter in 2015, with
from those with experience is vital. We
the loss of 18 lives, should remind us
have been involved in multiple cases of
all of the inherent risks in transporting
liquefaction, including both the Emerald
potentially hazardous goods such as
Star and Bulk Jupiter, for insurers. We
nickel ore. Since 2009, there have been at
have made significant recoveries for
least nine total loss cases attributable to
insurers in many cases. Early oppor-
liquefaction, resulting in the loss of over
tunities to collect evidence and obtain
100 lives.
security should not be lost. With the
The majority of liquefaction related absence of any crew, this may be largely
incidents involve cargoes loaded in the documentary but can be complemented
Philippines, Malaysia, India or Indonesia. by commencing proceedings in appro-
Liquefaction is the phenomenon that priate jurisdictions. Seeking third party
occurs when a solid material, such as evidence can also be invaluable.
iron ore fines, bauxite or nickel ore,
A firm recourse is needed – we owe it
loses strength at high moisture content,
to our seafarers to eradicate this totally
resulting in the solid material moving or
avoidable loss of life.
behaving like a liquid, particularly when
exposed to engine vibration and/or ship’s
motion. This in turn causes free surface
effect and creates a sudden and major
stability problem for the vessel, often
resulting in capsize.
Can these tragedies be prevented?
Absolutely. One of the root causes
behind the losses is poor compliance
by some shippers with the testing and
certification requirements set out in the
IMSBC Code; the Certificates of Quality
given to the Master are often unreliable
or simply provide false information.

SEASON’S
Commercial pressures should not be
allowed to eclipse safety and efforts

GREETINGS
should continue to find quicker, simpler
(but reliable) means of testing cargoes
to minimise delays in port. Innovation
also needs to be seriously considered
– should these cargoes be shipped on
different types of ships (e.g. purpose-built
OBO’s) or shipped in a different way (e.g. Providing legal advice to the maritime industry.
bagged in watertight bags or loaded in Our International Emergency Response service
tank containers). 24/7, 365 days a year.
Phone: +44 (0) 20 7283 6999

incelaw.com

Beijing  Cologne  Dubai  Hamburg  Hong Kong  Le Havre  

London  Marseille  Monaco  Paris  Piraeus  Shanghai  Singapore
IUMI EYE December 2017 18

The industry needs

a marine investigation code

By Captain Jon Walker

Regional Director of Asia & Australia
LOC
IUMI Professional Partner
www.loc-group.com

LOC is calling for better international The Nairobi International Convention on

cooperation and a marine investigation the Removal of Wrecks is a step forward
code to speed and simplify the process of and importantly promotes the idea that
managing a marine casualty. action should be “proportionate to the
hazard” and that activities “should not go
Too often local jurisdictions are unpre-
beyond what is reasonably necessary”
pared, lacking in understanding and
but the convention, although accepted in
unwilling to cooperate, and as a result the
2007 has yet to be ratified.
process takes too long, with a negative
outcome for the environment, the vessel’s Accidents will happen. But a maritime
crew or the damaged ship. accident investigation code would
minimise their impact, and better
Problems arise when a local authority
communication between governments,
does not know the limit of its jurisdiction
maritime authorities, shipowners,
and assumes authority of a casualty when
regulators and others would mean that
they have no right to do so. There are too
future casualties were better managed,
many examples of where the recovery of
the environment protected and seafarers’
a grounded or damaged vessel has run
rights observed.
over many years, where the investigative
and wreck removal process was flawed
or where the master ended up in jail or
otherwise detained.
I believe this could be addressed through
a marine investigation code, driven by the
IMO. The code would compel sovereign
states to clarify their jurisdictions with
their governments prior to any incident.
This would mean that in the immediate
aftermath, first responders would know
who to deal with and exactly the limits of
their authority.
A marine investigation code could estab-
lish transparent, consistent procedures
across national borders ensuring the best
response from all parties. Responders
would be able to coordinate with an
authority that understood the maritime
sector and the implications of a shipping
casualty. Sector expertise would be
invaluable in managing the response with
clear procedures, avoiding situations
where a local authority response is driven
by media, public emotion or political
agenda.

Providing marine and

engineering consultancy
across the globe
www.loc-group.com
 IUMI EYE December 2017 19

Life Science Shipments

Extract from paper by Barry Tarnef,

Vice President, Marine Loss Control,
Chubb Insurance and member
of the IUMI Loss Prevention Committee

Commercial insurance is one (perhaps This is not the ideal profile for any Also, will transportation companies
the only) industry where the seller does account yet alone a portfolio. How do develop routing networks that maximise
not know the cost of goods sold until well insurers deal with these types of risk their asset deployment with transfers and
after the purchase transaction. That is and, more importantly, how can shippers in-transit handoffs that elevate the poten-
certainly the reason why underwriters and other stakeholders (risk manage- tial for cargo loss, damage and delays?
have long practiced risk management, ment is a team activity) assist them? Or will logistics schemes result from a
a term that since the financial crisis of There are numerous channel partners more collaborative dialogue? These are a
the last decade seems to be included in or links in today’s complex, global supply few of the things that can disturb a senior
everyone’s lexicon. chain as goods travel from origin to manager’s quiet night sleep.
destination. Add to this the diversity
There are several paths toward risk Each insurance company develops
within the Life Science sector with “Big
management but here we will discuss its own underwriting criteria (“special
Pharma” where there is an expectation
loss prevention (limiting the likelihood of sauce”) based on corporate directives,
of state-of-the-art processes and proce-
loss/damage to goods in transit) and loss underwriting acumen and institutional
dures to growing generic companies,
control (reducing the extent and impact knowledge which may well be influenced
small startups and even NGOs working
of loss/damage should it occur). by “scar tissue” from past poor experi-
on drug outreach to underdeveloped
ence.
While these may not be the most exciting nations.
operational functions, we are buoyed by There are a number of factors to consider
The various supply chain constitu-
the words of Peter Drucker, the manage- but typically due diligence focuses on
ents may have differing objectives;
ment guru, – “The first duty of business the product, the trade lane(s), packaging,
ideally there will be more meshing
is to survive. The guiding principle the conveyance, transportation providers
than competing. With Life Science
of business economics is NOT (our and handling.
manufacturing continuing to shift its
emphasis) the maximisation of profits. It
centres of excellence from established For the full paper please click here:
is the avoidance of loss.”
to emerging hubs, can we expect brick
Due to some generally shared inherent and mortar and “virtual” companies
characteristics, Life Science shipments to outsource to contractors located in https://iumi.com/committees/loss-pre-
represent a unique challenge to marine regions with less established transport vention-committee
insurers that can be summarised by a few infrastructure potentially offsetting
bullet points. They have: benefits due to a lagging time to
market? Moreover, with geographical
— High per conveyance values
concentrations of production and the
— High perishability
drive towards “leaning” of inventories, it
— High theft-attractiveness
appears as if single localised disruptions
— High regulatory oversight
could wreak havoc.
— High total loss potential
IUMI EYE December 2017 20

People at IUMI

John Miklus
President of the American Institute of Marine
Underwriters (AIMU)
IUMI Education Forum Chair

How long have you been associated What benefits do you get from being to being named President of AIMU in
with IUMI? associated with IUMI? late 2013. While different jobs, I clearly
enjoy being involved with the marine side
My active involvement with IUMI began I can think of several. The first is access
of insurance and have benefited from
in early 2014, however, I attended nine to information such as the statistics
working in London for two years and from
consecutive IUMI Conferences, begin- compiled by the Facts & Figures
handling international clients.
ning with Toronto in 1994, during my Committee or the regular updates on
previous role as a marine reinsurance key issues being followed by the Political And what do you do away from the
underwriter. I then took a hiatus from Forum. office?
attending conferences after 2002 when
Next is personal learning, which fits well I enjoy spending family time with my wife
I left the underwriting side. So it has
with my role as Chair of the Education and 7-year-old son, as well as our two
been a reawakening to rejoin the annual
Forum. Whether it is from IUMI Eye Labrador retrievers. It’s especially nice
conferences, beginning with Hong Kong
articles, conference presentations, or when we can escape for visits to Cape
in 2014.
the regular webinars, there is always is Cod where I have a small boat that gets
What is your IUMI role today and what something new that I learn about the far too little use!
does it involve? marine insurance business.
My primary role is Chair of the recently Lastly and most important is the oppor-
created Education Forum, but I also tunity to meet and interact with marine
serve as Secretary to the Loss Prevention insurance professionals from around
Committee. I was honoured to be asked the world. It is fantastic that so many
by Dieter Berg, IUMI President, in the individuals choose to devote their time
summer of 2016 to chair the new Educa- and talents to IUMI in addition to their
tion Forum and am excited to be working “day jobs”.
with Hendrike and my fellow committee
If you could change anything at IUMI
members to develop an education
what would it be?
programme. The webinars – over 20
presented to date – have been a great I would like to see greater involvement
success and next year an online of younger people in the association.
e-learning cargo course will be launched. In addition, expanding the member-
Stay tuned. ship to include more national marine
associations is important and I know
And what is your day job?
that the IUMI Secretariat and Executive
President of the American Institute of Committee are actively trying to do so.
Marine Underwriters (AIMU). Running IUMI has made great strides in becoming
the US marine insurance trade associ- the recognised and respected voice of
ation has strong parallels with the IUMI the global marine insurance industry and
Secretariat. We both have the same should continue these communication
number of staff (three) and rely heavily efforts.
on our members to volunteer their time
How did you reach your current
to accomplish our mission. We’re both
position in marine insurance?
fortunate to have capable, talented staff
and great support from our members! Unlike many in our business, I don’t have
a maritime educational background.
After graduating from Bowdoin College
with an economics and government
major, I joined a marine insurance
training programme at The Hartford. I
spent 21 years there, mostly as a marine
reinsurance underwriter. I then spent
nearly eight years as a marine reinsur-
ance broker with Guy Carpenter prior
IUMI EYE December 2017 21

Address by IUMI Asia

the Secretary General Forum 2018
By Lars Lange, IUMI Secretary General

One of IUMI’s core responsibilities is to Nick has decided to step down from his Preparations for the inaugural
lobby for safer and more security in the role as IUMI’s IMO Liaison Officer at the International Union of Marine Insurance
maritime and transportation industry. end of 2017. We would like to thank Nick (IUMI) Asia Forum, in association with
IUMI’s lobbying work includes the topics very much for all his hard work on behalf the General Insurance Association of
that are published in the association’s of IUMI and for his very warm-hearted Singapore (GIA), are well under way. Set
current issue list. The most important approach which has always had the to take place on 24–25 April 2018 during
place to develop these issues is at the people (and not only the issues) at the Singapore Maritime Week, this highly
International Maritime Organization IMO centre. Nick ensured that IUMI’s voice anticipated event will be held in the
in London and IUMI’s official seat as was heard at the IMO and his extensive beautiful location of Marina Bay Sands
accredited NGO at IMO is very close to underwriting experience enabled him conference centre.
our heart. to recognise the issues important for
The maritime hub of Singapore could not
marine insurance.
Accordingly the work of IUMI’s liaison be a more apt location for the first ever
officer to IMO is of high importance Nick will continue his position as IUMI Asia Forum. IUMI President Dieter
and very much at the centre of IUMI’s Salvage Forum chairman and he will Berg will be opening the conference
work. The IUMI Liaison Officer visits also continue to hold consulting roles in and hot industry topics such as places
all relevant IMO committee meetings; the market. For the time being, the IUMI of refuge, misappropriation, blockchain,
monitors all topics discussed and papers Executive Committee has put IUMI’s IMO shipping and trade – a market outlook,
issued at IMO and informs the IUMI activities in the hands of the Hamburg will be presented by leading insurance
Technical Committees accordingly. Secretariat, which has increased its professionals.
They also closely maintain a contact staffing in 2016 and has, in 2017, begun
This new IUMI event has been created as
network with IMO officers and flag state to be more involved in IMO meetings and
a next stage following the founding of the
representatives at IMO and raise, where discussions.
IUMI Asian hub earlier this year in Hong
necessary, IUMI’s voice in the meetings
Kong, to give us more visibility in the
and in between.
region and to bring us closer to our Asian
The role of IUMI’s IMO Liaison officer members and the maritime industry in
has, since January 2014, been in the general.
capable hands of Nick Gooding. Nick had
To register your interest please
worked for more than three decades in
click here – we hope to see you there!
the Lloyd’s market as a cargo underwriter.
He had been involved with IUMI for a
very long time, holding a high, if not the
https://iumi.com/events/events-
record number of presentations at IUMI
worldwide
conferences and has been engaged in
IUMI’s work and committees, not least as
Chairman of the IUMI Salvage Forum.
IUMI EYE December 2017 22

Another year, another successful

annual conference

Leading marine insurance professionals But it wasn’t all work and no play. The
and IUMI members assembled at the GIAJ hosted the conference opening
impressive conference suite of the reception at the Miraikan, Japan’s
Grand Nikko Tokyo Hotel, located in the National Museum of Emerging Science
beautiful area of Daiba, and discussed and Innovation, which is also home to
key industry issues such as cyber threats, ASIMO – the humanoid robot created by
digitalisation, autonomous shipping, Honda. This was a fitting location that
and block chain, to name a few. It is clear certainly showed the rapid advancement
that global innovations are changing in technology. The conference closed
the marine insurance sector and marine with a “Japan evening” at the Grand
insurers must go beyond their traditional Prince Hotel New Takanawa – delicious
expertise if they are to continue to provide food and great company was enjoyed by
high quality underwriting provision for all.
their clients.
We would like to take this opportunity to
once again thank the GIAJ and everyone
involved in making this year’s conference
a huge success. We would also like to
thank our members and everyone who
attended as the people are the heart of
the conference. We hope to see you next
year at the 2018 annual conference in
Cape Town (16–19 September 2018).

Imprint International Union of Marine Insurance Editorial team

Hendrike Kühl, IUMI, Hamburg
Grosse Elbstrasse 36 Katerina Dimitropoulos, Navigate PR, London
D-22767 Hamburg, Germany
Telephone +49 40 2000 747-0 Design
Keller Maurer Design, Munich
Email [email protected]
© 2017 International Union of Marine Insurance
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