IUMI 2018 THE 2017 HURRICANE SEASON AND THE EFFECT ON THE PLEASURE CRAFT UNDERWRITING MARKET 18 SEPTEMBER 2018
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1 IUMI 2018 THE 2017 HURRICANE SEASON AND THE EFFECT ON THE PLEASURE CRAFT UNDERWRITING MARKET 18 SEPTEMBER 2018
2 IUMI 1984 HELSINKI
3 SMALL CRAFT, LEISURE CRAFT, PLEASURE BOATS AND YACHTING, AND THE EFFECTS AND CHANGES PRE AND POST THE 2017 HURRICANE SEASON FOR THOSE UNDERWRITERS WHO WERE INVOLVED
4 CHANGES THAT HAVE OCURRED IN THE RISK PROFILE PRACTICALITIES CRIME DECREASING LEISURE TIME RISE OF CHARTER INDUSTRY VESSEL DESIGN SURGE IN ELECTRONIC EQUIPMENT AND SYSTEMS
5 A MONO HULL
6 CATAMARANS
7 COMPETENCE BARE BOAT AND CHARTER Charter skipper often has little experience of heavy weather sailing and conditions. The charter/time share market, encourages the owner skipper/ bareboat charter concept - skipper is only able to sail for a short period every year, therefore not familiar with the local waters.
8 LEGISLATION LIABILITIES TCF
9 THE GENERALLY ACCEPTED EXCLUSION ZONE AND WORDING FOR YACHT POLICIES Warranted no claims in respect of damages occurring North of 9 degrees North and South of 35 degrees North, West of 55 degrees West and East of 100 degrees West as a result of a named windstorm during the period 1 st July to 30 th September.
10 WHAT IS A HURRICANE?
11 HURRICANES BEAUFORT SCALE Gale 68kms hour (difficult to walk) Severe Gale 81kms /hour Storm 98 kms / hour Severe Storm 110 kms / Hour Serious damage done Hurricane 118 kms/ hour
12 NAMED WINDSTORMS A Named Storm or Named Windstorm is a storm, cyclone, typhoon, atmospheric disturbance, depression or other weather phenomena designated by the US National Weather Service and/or the US National Hurricane Center and where a number or name has been applied.
13 HURRICANE AREA
14 THE START OF THE 2017 SEASON
15 THE MONTH OF AUGUST IS TRADITIONALLY THE WINDY MONTH:
16 SEPTEMBER HAD THEN FOLLOWED SUIT
17 THE THREE MAJOR HURRICANES
18 2017 SEASON; OCTOBER THROUGH NOVEMBER:
19
20
21 CATAMARANS CAN FLY JUST NOT VERY HIGH!
22 BUT NOT VERY HIGH
23 UNDERWRITING AND CLAIMS HANDLING ISSUES THAT HAD ARISEN To ascertain the damage under these circumstances is very difficult and takes a long time
24 REPAIR FACILITIES AND TIMING/ CASH IN LIEU OF REPAIR/ TCF Not enough repair facilities and cash available
25
26 ANOTHER CTL
27
28 ANOTHER CTL
29 NOTICE OF ABANDONMENT and WRECK REMOVAL Wreckremoval under these circumstances is a nightmare Hardly any equipment available to assist
30 . NEWS HEADLINES
31
32
33 AGREED VALUES / MARKET VALUE Market value often much lower than Agreed Value Market value can change over the years
34 APPLICATION OF EXCESS RE CTL Due to the high costs involved an increase of CTL claims With this also a lot of Excess /Disbursement policies came in force
35 ACCUMULATION Accumulation is a major concern as the changes in yacht ownership have given rise to large numbers of craft being held in close proximity to each other during the season
36 BEFORE THE STORM
37 AFTER
38 DO PRECAUTIONS WORK BOAT TIE DOWN AND HURRICANE PROOFING TAKING BOATS OUT OF THE WATER
39
40
41 THE EFFECT OF THE HURRICANES ON THE YACHT INSURANCE INDUSTRY
42 Some insurers have quit the market due to losses and many are now considering under what circumstances they can continue to cover yachts in hurricane-exposed regions, especially during the actual hurricane season Volker Dierks AGCS
43 THE EFFECT OF THE HURRICANES ON THE YACHT INSURANCE INDUSTRY The statistics from the Boat Owners Association of the USA; Excess of recreational boats damaged or destroyed Estimates in the region of $700M for this damage. Excludes all of yachts which were insured elsewhere.
44 Hurricane Irma damaged or destroyed 50,000 vessels with approximately $500 million in recreational boat damage Hurricane Harvey inflicted a damage toll of $155 million on about 13,500 boats While Hurricane Irma s losses are significant, it could have been much worse, Boat US Marine Insurance Program Vice President of Claims
45 WHAT UNDERWRITING LESSONS WERE LEARNT AS A RESULT TIE DOWN AND OTHER SECURING PLANS DO NOT REMOVE THE RISK AS MANY VESSELS WERE DAMAGED BY FLYING DEBRIS FROM BUILDINGS AND OTHER BOATS. IF BOATS ARE TAKEN OUT OF THE WATER FOR THE HURRICANE SEASON THE MASTS AND SAILS MUST BE DE-RIGGED AND UNSTEPPED TAKING VESSELS OUT OF THE WATER PRIOR TO THE HURRICANCE SEASON DOES NOT MAKE MUCH DIFFERENCE TO THE DAMAGE OUTCOME IN MOST INSTANCES BY THEIR NATURE HURRICANES ARE CATASTROPHIC EVENTS AND AS SUCH CONSIDERATION MUST BE GIVEN TO THE UNDER SUPPLY OF SUITABLE REPAIRERS AFTER SUCH AN EVENT IN MANY INSTANCES THE OWNERS WERE UNAWARE AS TO THE EXACT WHERABOUTS OF THE VESSEL PRIOR TO THE STORM AND MANY VESSELS WERE UNDER THE CUSTODY AND CONTROL OF CHARTER COMPANIES AND THIS SHOULD BE NOTED ON THE POLICY CATAMARANS BY THEIR DESIGN ARE MORE PRONE TO DAMAGES CAUSED BY EXTREMELY HIGH WINDS
46 TO CONCLUDE WHAT IS THE BEST TYPE OF PLEASURE CRAFT RISK TO INSURE IN THE HURRICANE BELT DURING THE SEASON?
47 A BOAT YOU CAN TAKE HOME WITH YOU!
48 THANK YOU Acknowledgements Google Earth Voyage Yachts USA Coastguard BoatUS Marine DAVID MILLER
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