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LONDON MARINE | London’s Edge In association with Hiscox
Jenna Hales, Marine, Energy and Specialty Claims Manager at Hiscox London Market, explains why a marine policy issued by the London market is money well spent for shipowners
Beware of bargains Insurance is nothing more than a promise to pay, which is only tested when a problem occurs. That is when you find out what you’ve really bought. Even if your insurer has every intention of honouring its commitment, if it doesn’t have the resources – both in intellectual and financial capital – to do so quickly. Then the accumulated fees and delays incurred by a vessel’s operator could make the premium saving meaningless in the final outcome. There are no simple problems when you are dealing with something as complex as an offshore oil rig or an ocean-going vessel. The quality of the claims service provided by the London market is often taken for granted. But, when there is a problem, it can step in incredibly quickly, either taking control of the situation or offering the ship owner constant advice and assistance from the wings. Not every international insurer is as responsive or as flexible.
DELAYS CREATE COSTS
Take a fairly run of the mill incident, for example, like a collision between two vessels. The owners must put up The Marine Insurer | March 2022
collateral to release their ships, and obviously the sooner that is put up, the quicker the ship can be released and carry on with its voyage. A ship’s insurers will put up that collateral by way of financial security. But, what I have seen happen is that the London insurers that are on risk put up their share very quickly, whereas following insurers from emerging-markets countries often take longer to deliver their portion. In London, all insurers are rated as financially very strong, and the system we work within is set up to move money within the blink of an eye. Outside of London, certain other insurers are not only slower to respond, but, they also do not enjoy the same financial rating and must be measured separately by guarantors that put up the security on our behalf. Meanwhile the ship is idle, often racking up fees and legal costs in the process. When a problem arises that will take time to resolve, such as if the ship needs to be repaired before it can sail again, then a speedy response is again vital. As soon as it is established that the issue is covered under our policy, London market insurers will often swiftly offer the shipowner a payment on account. We’ll even make that to the shipyard directly to speed up the repair process, if necessary. Other markets do not always have that same autonomy or authority. While London market insurers have been able to quickly put hundreds of thousands, even millions of dollars up on account without the claim having been finalised, others must go through a painful process of going through their longer and slower chain of command to get the green light.
