Bow Wave Issue 627–Flood Loss Edition

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Contents in this issue:

1. Welcome
2. MV Rabaul Queen
3. Box Tracking Set to Become a Big Thing
4. Sichuan Speeds up Investment in Waterway Infrastructure
5. Thai Floods
6. And Finally…

Broadly Boats News

Broadly Risks

Firetrench Directory

1. Welcome

Poem of the Week

Meditation from 14A

And what if the passage out of this life
is like a flight from Seattle to St. Louis–

the long taxi out of the body, the brief
and terrible acceleration, the improbable

buoyancy, and then the moment when,
godlike, you see the way things fit

together: the grave and earnest roads
with their little cars, stitching their desires

with invisible thread; the tiny pushpin houses
and backyard swimming pools, dreaming

the same blue dream. And who but the dead
may look down with impunity on these white

birds, strewn like dice above the river whose name
you have forgotten, though you know,

having crossed the Divide, that it flows
east now, toward the vast, still heartland,

its pinstriped remnants of wheat and corn
laid out like burial clothes. And how

you would like to close your eyes, if only
you could stop thinking about that small scratch

on the window, more of a pinprick, really,
and about yourself sucked out! anatomized!–

part of you now (the best part) a molecule
of pure oxygen, breathed in by the farmer

on his tractor; by the frightened rabbit
in the ditch; by a child riding a bike

in Topeka; by the sad wife of a Mexican
diplomat; by a dog, digging up a bone

a hundred years in the future, that foreign city
where you don’t know a soul, but where you think

you could start over, could make a whole
new life for yourself, and will.

Jennifer Maier (2006)

———-

News of Readers

Hilary Devey, the Chief Executive and Chairman of Pall-Ex (the pallet network)
and top UK TV entrepreneur on Dragons’ Den, is becoming ever more popular:
you can now buy Hilary face masks on ebay for as little as £3.10.

—–

The Maritime Prize 2011 (in Danish, Den Maritime Pris 2011) was formally
presented to the MBA program by Denmark’s Minister for Business and Growth,
Mr Ole Sohn, in a ceremony on February 10 2012 at the Danish Design House,
Copenhagen. The minister presented the award to the president of CBS,
Per Holten-Andersen, and the Blue MBA program director Irene Rosberg,
in front of an industry audience of distinguished guests.

After 13 years as chairman and CEO of Willis Group, Joe Plumeri will bring
the curtain down on his time at the head of the big three broker next July
as he celebrates his 70th birthday.

—————————–

Note from the Editor

Realisation has dawned that the recent flooding in Thailand
is a very big deal indeed for the worldwide insurance industry.
Writing business too cheaply in Asia is not the only way to
lose a packet. Item 5 refers.

Enjoy!

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2. MV Rabaul Queen

A total of 372 people were on board the 22-year-old Japanese-built
ferry, MV Rabaul Queen, when it sank near the end of its 20-hour,
290-nautical mile journey between Kimbe and PNG’s second largest
city, Lae on 02FEB12.

A major rescue operation, involving the Australian Maritime Safety
Authority and PNG authorities, rescued some 246 people of those
on board. most of those on board.

Rabaul Shipping said it was devastated by the disaster.

“We are stunned and utterly devastated by what has happened,”
managing director Peter Sharp said in a statement.

The company said the ferry’s captain had routine radio contact
with another vessel before the sinking and gave no indication
anything was wrong.

Some of this tragic story bears a passing resemblance to other
coastal and island ferry casualties in this part of the Pacific.
Voices in the London market were asking whether the ship
was carrying more than she was rated to carry, whether she was
carrying P&I insurance and whether she is beneficially owned
by Australians. Perhaps one of our readers knows the answer.

<>————————-<>————————–<>

3. Box Tracking Set to Become a Big Thing

We are grateful to the Containerisation Group on LinkedIn
for this news of technological progress:-

According to a new research report from the analyst firm Berg Insight,
the number of active remote container tracking units deployed on
intermodal shipping containers was 77,000 in Q4-2011. Growing
at a compound annual growth rate (CAGR) of 66.9 percent, this
number is expected to reach 1.0 million by 2016. The penetration
rate of remote tracking systems in the total population of
containers is estimated to increase from 0.4 percent in 2011
to 3.6 percent in 2016. Berg Insight’s definition of a
real-time container tracking solution is a system that
incorporates data logging, satellite positioning and data
communication to a back-office application.

The market for container tracking solutions is still in
its early stage. Aftermarket solutions mounted on high
value cargo and refrigerated containers will be the first
use cases to adopt container tracking. Orbcomm has after
recent acquisitions of Startrak and PAR LMS emerged as
the largest vendor of wireless container tracking devices
with solutions targeting refrigerated containers. Qualcomm,
ID Systems and Telular are prominent vendors focusing on
inland transportation in North America, which is so far
the most mature market for container tracking solutions.
PearTrack Systems, Honeywell Global Tracking, EPSa and
Kirsen Global Security are examples of companies offering
dedicated solutions targeting the global end-to-end
container transport chain.

“Ever since the events of 9/11, there have been a lot of
activities to bring container tracking solutions to the
market”, said Johan Svanberg, senior analyst, Berg Insight.
He adds that it is however first now that technology
advancement, declining hardware prices and market
awareness are starting to come together to make remote
container tracking solutions attractive. “Container
telematics can help stakeholders to comply with regulations
and meet the high demands on security, information visibility
and transportation efficiency that comes with global supply
chains” concluded Mr. Svanberg.

Read more and download summary with forecasts etc. at:-

http://goo.gl/mDbNG

[Editorial note: we can remember Savi Technology and others
boosting this technology 10 years ago. Still looks like a
damp squib all these years on]

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4. Sichuan Speeds up Investment in Waterway Infrastructure

This item appears in the latest edition of Yangtse News, the
superior zine issued by David Lammie:-

Sichuan provincial governor Jiang Jufeng announced recently
that his government will speed up investment in waterway
infrastructure so that by 2020, 2,000-3,000 dwt vessels
can sail on the Yangtze trunkline and 1,000dwt vessels
can sail in the tributaries. By then, container handling
capacity is expected to reach 4m TEU.

The major port on the Yangtze trunkline is Luzhou, which
can accommodate vessels between 1,000dwt and 3,000dwt
depending on the season. Low water levels in recent dry
seasons have led to a suspension of shipping in Luzhou.

The local government spent Rmb7.2bn on the waterway during
11th five-year period, the governor said, and it plans to
increase spending to Rmb40bn in the current 12th five-year
plan. Money will be spent on dredging (most of the waterways
in the province have not been dredged), standardising vessels
and modernising ports. The government hopes that, by 2020,
3,000dwt dry bulk carriers and container vessels carrying
more than 200 TEU will dominate shipping on the upper reaches
of the Yangtze.

To subscribe send an email to:-

mailto:info@yangtzebusinessservices

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5. Thai Floods

A.M. Best Co. has released a briefing that provides updated
estimates of insurers’ losses from the Thailand floods. The
overall industry wide insurers’ loss estimates from the
floods have increased 50 percent to $15 billion since Best’s
last briefing on this event, published Nov. 23, 2011. “Such
a loss would place the Thai floods in a tie for the fifth
costliest insured loss event in the past 31 years,” Best said.

But the insured losses are only part of the story. Best cited
a study from Aon Benfield, which estimates that the floods
in Thailand “have damaged or destroyed more than 4 million
homes, businesses and manufacturing facilities.” The amount of
structural damage is actually “four times greater than what
resulted from Japan’s earthquake and tsunami in March 2011,
but only half of the total insured loss due to a low rate of
insurance adoption.”

How to assess business interruption (BI) claims and contingent
business interruption (CBI) claims, which are based on supply
chain interruption, rather than actual property losses, remains
a conundrum.

Best explained: “Insured parties have several limitations on
their ability to make CBI claims. If property insurance does
not cover a certain peril, then related CBI claims will not
be covered. Insurers could encounter reinstatement issues
and face problems on first-loss limits from firms with
multiple locations, as dates of damage vary for different
industrial estates. Event limits were not always specified
in Thai insurance contracts. Classifying the floods as
multiple events could increase costs for the insurers/reinsurers
that are involved. Many impacted companies moved to Thailand
to mitigate losses from the March 2011 earthquake and tsunami
in Japan. As a result there are increasingly complex ‘causation
and adjustment issues.’

Best noted that until recently “flood coverage for most
industrial and large commercial companies was automatically
included in the industrial all risk (IAR) policies, with almost
100 percent of the sum covered.”

That is in the process of being changed drastically. Guy Carpenter
noted that at January renewals there “was widespread interest
in imposing limits on proportional treaties.” Willis Re stated
that “besides capping proportional treaties, there were no
immediate significant changes to underwriting.”

However, Best said the Thai commercial insurance industry “will
likely begin facing sharply contracted capacity, higher pricing
and tighter terms for coverage with the Asian and Japanese
reinsurance renewals in April. In 2012, flood coverage will
be separated from IAR policies.

“Flood policy premiums are expected to double or triple from
previous levels, while the renewal and expansion of excess-of-loss
protection has driven rate increases ranging from 500 percent
to 1,000 percent.” Policy limitations on coverage amounts available
for specific types of loss are likely to be cut by between 10 and
20 percent of the sum insured. Deductibles of 10 percent are
likely to follow.

In conclusion best underscored that the “unprecedented flooding
has forever changed the perception of risk in Thailand and brought
about significant changes to the Thai insurance industry.” The
rating agency foresees more “mergers, acquisitions and deals,” as
companies look for ways to offset heavy losses.

In addition Best said that “given the overall uncertainties and
previous experience with other significant, un-modeled losses,” it
expects to see additional upward revisions to initial loss estimates
and feels that the amount of the total insured loss could change–
a situation that it will be closely monitoring.”

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6. And Finally…

Just in from Frazer Hunt comes this fine play on words:-

Wee Billy from Glesga always wanted to look cool.

His friend told him that he needed a good designer pair of
trainers to go with his shell suit.

Billy saved up all his Giros and all the money he got back
from returning his empty bottles of Ginger and finally managed
to get himself a pair of brilliant white trainers to go with
his shell suit.

Proudly, he strutted down the street calling out to all the
passers by “See ma new trainers? Stonkin, eh?”

One fine upstanding gentleman pointed out that they were
ndeed a fine pair of trainers but was young Billy aware
that one shoelace was undone?

Billy scornfully retorted that it was part of being cool to
have a trailing lace on one trainer and that on the sole of
the trainer there were instructions for the wearer to do such
a thing.

When asked for proof of this instruction, Billy look off his
trainer and held it upside down for the disbeliever to read.

“There y’are! It clearly says ….

Taiwan !!!!!

———

P.S. For some reason, the inbox of your editor usually contains
each week at least one joke within the parish of the Catholic Church.
This one is par for the course….

A guy goes into the confessional box after years being away from
the Church. He pulls aside the curtain, enters and sits himself down.
There’s a fully equipped bar with crystal glasses, the best vestry
wine, Guinness on tap, cigars and liqueur chocolates nearby, and
on the wall a fine photographic display of buxom ladies who appear
to have mislaid their garments.

He hears a priest come in: “Father, forgive me for it’s been a
very long time since I’ve been to confession and I must admit
that the confessional box is much more inviting than it used to be”.

The priest replies,”Get out you idiot. You’re on my side”.

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