Download - “The Underwriting of Marine War, Terrorism and Piracy in the 21 st Century”

“The Underwriting of Marine War, Terrorism and Piracy in the 21st Century”

History – Why a separate class of business, why not included in hull all risks.

Change in Risk - Operative peril has shifted as the world has changed from war to terror/piracy and war.

Change in cover and process - Consequently market has been forced to change the coverage it gives and the manner in which it is given.


• War policy is a limited write back of an exclusion that is applied to an all risks policy.

Developed as a result of Spanish Civil War. 1936 War and Civil War Exclusion Agreement. Amended after Hiroshima to address Nuclear Weapons. After 70 years, the 1936 Agreement with its more

recent amendments remains as relevant today as it was then, to avoid giving coverage for an accumulation of risk which could exceed the capital available to us as underwriters.

History


Singapore Container Terminal CL370, CL380 to address dirty bombs and

computer viruses.


“Seawise Giant” 1986 - Casualty of the Iran/Iraq war.

“The Limburg” 2001 – Casualty off the coast of Yemen.

21st Century Risks and Losses – Has Anything Changed?


WTC


Philippine Ferry – “SuperFerry 14” 2004 – result of the actions taken by Abu Sayyaf guerilla’s


“Seawise Giant” - Casualty of the Iran/Iraq war.

“The Limberg” 2001 – Casualty off the coast of Yemen.

21st Century Risks and Losses – Has Anything Changed?


Malacca Vessel Steadfast

Vegetable-oil-loaded Tanker, 17,650 DWTSailing for China from IndonesiaWent missing on the 18th December 2005Found abandoned on the 24th December 2005


New Government Pools – TRIA, USA - Gareat, France - Extremus, Germany

Existing Pools - Pool Re (UK) - SASRIA (South Africa)

- CONSORICO (Spain)

War on land in Lloyd’s


Change in Cover and Process

Change in market procedure

Advisors are security analysts

Look forwards as well as back


Seabourne Spirit

•Was this War or Piracy?


Hull War Clauses – Change in Cover and Process

WORDING PERILS COVERED

Institute War and Strikes Clauses – Hulls – Time (01/11/95) War, Terrorism, no Piracy

American Institute Hull War and Strikes Clauses (01/12/77) War, no Terrorism, no Piracy

Norwegian Marine Insurance Plan – Chapter 15 – War Risk Insurance War, Terrorism, Piracy

The Hellenic Mutual War Risks Association (Bermuda) Limited – Rules War, Terrorism, Piracy

Japanese War Clauses War, Terrorism, Piracy

Missing Vessel Clause

This insurance is also to cover a loss of the subject matter of thisinsurance by reason of the vessel named in this policy beingmissing from ANY CAUSE during the currency of this Policy and thispolicy WILL PAY CLAIMS hereunder accordingly WITHIN THIRTYDAYS of presentation of proper documents.If such vessel be recorded at Lloyd’s as “untraced” or “posted” asmissing, she shall be DEEMED MISSING for the purpose of thisinsurance.No claim shall attach under this section where the specific cause ofthe loss of the above named vessel is proved by Underwritershereunder prior to the due settlement date of claim under thissection.

Talbot Draft Missing Vessel Clause

In the event of the vessel named in this policy being recorded at Lloyd’s as “untraced” or posted as “missing” in the territorial waters of any of the countries or places or any other waters described in the current List of Areas of Perceived Enhanced Risk as may be published from time to time by the Joint War Committee, this policy will pay the sum insured in respect of that vessel within 90 days of presentation of proper documents. Under no circumstances will this policy pay more than the sum insured for war risks under this policy. In consideration of such payment war risk underwriters shall be subrogated to all rights and remedies that the assured may have against marine underwriters. In the event that such subrogation becomes necessary, the assured shall co-operate fully with war risk underwriters in the pursuit and settlement of such claim and shall furnish underwriters with all necessary documentation and assistance. If within 90 days of presentation of proper documents underwriters produce prima facie evidence that the loss is not covered by reason of an exclusion contained in this policy this clause shall become inoperative and the burden shall then rest with the assured to prove that the loss was proximately caused by a peril insured under this policy.

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