and lubricating oil management. However, continuing to pay out claims for replacement or repair of damaged components without first finding the root causes of these problems will only lead to further gradual depletion of the buffer between claims paid and premiums collected, which as noted earlier is ultimately lead unsustainable.


As former seafarers, captains and chief engineers, surveyors are well- versed and very familiar with the inner workings of ships, whether in relation to a ship’s systems and components or the working culture of its crew. This puts surveyors in a prime position to offer greater analysis and insight into deeper- seated issues which, once rooted out and addressed, could see both the shipping and marine insurance industry operate more sustainably. Ships and their machinery would then function more effectively and insurers could see less recurrence in types of claims paid and see an increase in the buffer needed to continue supporting the marine insurance industry’s sustainably.


While a surveyor’s main role is to investigate a claim and present their assessment of damages reported to insurers for claims processing, the detail in each individual report goes a long way to helping identify other factors that contributed to the loss or damage of machinery. Armed with a greater level of detail, insurers can then decide if support beyond a financial payout is needed to help the ship achieve greater efficiencies in the long run, lessening their overall reliance on insurance claims pay outs to keep their vessel in top shape. Surveyors, as such, need to recognize the critical importance of their roles and the wider impacts that their work can have on the overall global shipping sector.


While we are aware of the many underlying issues that affect the overall serviceability of a ship and its components, insurers also understand that the increasingly challenging and competitive global shipping landscape has


caused ship owners and shipping managers to stretch resources as far as they possibly can. This has given rise to some less-than-ideal ship maintenance practices, including the use of parts from non-original equipment manufacturers and employment of non-approved workshops for servicing of high- tech specialised equipment. Also delaying equipment or engine overhauls till the very last minute, and the employment of unauthorized service engineers.


While this might help cut down on costs for ship owners in the short term, delayed servicing and use of non-original equipment could have detrimental long- term effects on a ship’s systems and components, leading to an increase in claims made for damaged or lost machinery.


CONDUCTING THOROUGH RISK ASSESSMENT


Beyond providing financial payouts in times of peril, and providing insulation from financial setbacks for ship owners plying their trade in global waters, marine insurers also play advisory roles to ship owners by conducting thorough risk assessments as part of the regular policy writing and review process. With a greater awareness of root issues that lead to system failures on ships, insurers are then able to alert and educate ship owners and their crew on best practices which can serve as the first step in cutting down overall down time or even grounding of a ship.


The role of surveyors and insurers will need to evolve with and adapt to the challenging hull landscape that ship owners and crews work in today. Acknowledging the many challenges shippers face to operate with lesser expenditure and cost, surveyors should see their roles move from simply reporting damages or loss of a ship’s components and serviceability to also being investigators to identify root causes of issues that have surfaced. This investigative


mindset and emphasis on finding the real reasons behind persistent problems should be regarded as common practice in generating damage assessments.


The delivery of larger ships that operate with more sophisticated systems will also drive significant change. As a result, ship owners’ exposure to risk is becoming greater, and this will mainly be borne by their insurers. While insurers have supported the marine shipping industry since its early days, the increasing competition both in the shipping and insurance landscape has also increased pressure on loss ratios, which could end impact the price of premiums and deductibles in policies going forward.


As marine surveyors are the eyes and ears of insurers, the importance of detailed reporting cannot be understated. Insurers have a responsibility to ensure they maintain an adequate buffer to be able to finance any major catastrophes, such as the Costa Concordia shipwreck in 2012 or the Sewol ferry disaster in 2014. However, if the buffer continues to be depleted by claims for small but increasingly common issues arising from crew negligence or neglect, the desire of insurers to continue to financially support firms caught in unfortunate eventualities could be compromised.


Against this backdrop, surveyors need to adopt the greater responsibility of being investigators on top of being reporters, to help support insurers’ ability to mitigate and transfer the risk of perils at sea for the global shipping community. After all, insurers are here to support sea trade, and seek to do so by providing insulation through adequately priced premiums that make economic sense to owners. Any imbalance in the economics of marine insurance is likely to have a direct effect on premiums deductibles and cover, which then also directly affects the viability of sea and international trade. Collectively we need to do all we can to stop that from happening.


The Report • December 2017 • Issue 82 | 31


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80