The job of the marine underwriter, put simply and traditionally, is to ensure that more is taken in to the premium account than is paid out after claims. Aside from the complexities of reinsurance and laying off risks, it might seem a relatively undemanding task for the experienced insurer. But talk to any informed marine underwriter and there is a list of nagging concerns which need to be addressed before he will happily take a line on some maritime risk.
Many of these concerns revolve around the operation of ships, while many of them might be thought attached to the issue of the human element, so often in the forefront of problems which face the whole industry. It is said, for instance, that ship machinery is now reaching a level of sophistication and complexity that is beyond the competence of many marine engineers, trained and experienced in simpler machinery. Maybe this should not be surprising. Car engines are now so complex and laden with electronics and data monitoring devices that the skilled and competent mechanic cannot service such equipment and only specialist garages can do the work.
The difficulty arises when things go wrong and the ship’s engineers find themselves powerless to intervene, without either the experience or the technical tools necessary.
Underwriters read of the worrying number of ships experiencing engine trouble associated with fuel changeover, facing blackouts in embarrassing places, and worry about whether a ship they might have insured is vulnerable and could even be lost if the weather and location was unfavourable to rescue or salvage.
Increasingly, the well-informed underwriter will ask probing questions about the technical and operational management of the ship and especially about the experience of the responsible officers, with concerns publicly expressed about people soaring to senior ranks without the benefit of much experience in the rank below. They are not oblivious to the manning shortages, the comments about crew competence from certain parts of the world and would like assurances about such matters.
They have been made aware of some of the considerable changes that are taking place in the marine operating arena. They will have read about some of the problems that have been identified with the mandatory fitting of ECDIS and will want to assure themselves that those bridge teams on their insured ships are properly trained in the new technology, and especially the equipment fitted in their ship. Hopefully, they muse, rocks and islands and other underwater obstructions will not have been “edited out” of the ECDIS screens as the ship moves across them!
What other concerns might there be? The observant underwriter will be keeping an eye on repair bills, and ship and machinery quality, with vessels emerging from new “Greenfield” shipyards. They may have been informed about the quantity of second hand and allegedly “refurbished” parts fitted to “new” ships. And of course, high on their list of concerns will be the worries about the sheer size of some of the new ships, both in the containership world and on the cruise berth. For an underwriter, there is a lot about which assurances will be sought!
Articles written by the Watchkeeper and other outside contributors do not necessarily reflect the views or policy of BIMCO.