Lancashire Holdings rues Costa Concordia losses

Insurance group Lancashire Holdings' performance was hurt by the COSTA CONCORDIA shipwreck in the first quarter, while pay costs have rocketed. The main way insurance companies are judged is by something called the “combined ratio” - this compares the amount received in premiums against the amount paid out on claims. Any number below 100% implies a company is making a profit through the core activity of underwriting risk (as opposed to simply making money from investments). 

Lancashire’s combined ratio for the first quarter was 74%, up from 73.1% at the end of last year and the 63.7% seen over the whole of 2011. In other words, things have got marginally worse on the underwriting front. This is partly because the firm was stung by claims related to the Costa Concordia disaster in January. Lancashire’s Chief Executive Officer, Richard Brindle complains that: “While the COSTA CONCORDIA loss affected our combined ratio, as it has many others in the industry, it has been frustrating to see industry-wide pricing in marine lines failing to show the improvements that might have been expected following such a loss.” 

So Lancashire and its peers are unable to charge more despite the COSTA CONCORDIA grounding costing the industry perhaps as much as $1bn. Other bad news on the financial front was a big jump in pay costs which totalled $18.5m during the quarter compared to $10.3m in the same period of 2011. This increase is partly explained by a one-off national insurance charge of $6.9m, incurred as a result Lancashire’s tax residency move to the UK effective from January 1st, 2012. During the first quarter gross written premiums were $234m, up from the $171.9m seen at the same point of last year. Profits before tax were £46.5m against £8.4m in the prior year while the group’s total investment return improved from 0.6% in 2011 to 1.1% so far this year. At 08:30 Lancashire shares were down 2%, probably because of the worsening combined ratio. For the last 12 months though the stock is still ahead by 26% which is no mean feat in the current markets. Source : sharecast 

GL Releases Rules Updates for Seagoing Ships and Naval Vessels

Germanischer Lloyd (GL) has released updates to its Rules for Seagoing Ships and Naval Vessels. The updated Rules came into effect on 1 May 2012.

Changes have been made to the following GL Rules for Seagoing Ships: Classification and Surveys, Hull Structures, Machinery Installations, Electrical Installations, Automation, Structural Rules for Container Ships and Stowage and Lashing of Containers.

Additionally, new Rules have been developed for the classification of Crew Boats and Offshore Wind Farm Service Craft.

For Naval Ships updates have also been carried out for the following Rules: Classification and Surveys, Propulsion Plants, Electrical Installations, Automation and Ship Operation Installations and Auxiliary Systems.

The GL Rules and Guidelines are also available for download for the first time in their entirety. Up to this point the Rules and Guidelines have only been available on a section by section basis. Visitors to Germanischer Lloyd’s website will now be able to download a complete pdf version of any of the individual Rules or Guidelines free of cost.

Some of the most notable changes to individual Rules include: the Rules for Machinery Installations now have new requirements for exhaust gas cleaning systems. These requirements address system layout, safety concept (hazard analysis), materials, and handling of noxious process substances. The requirements for functional testing onboard are also covered.

In the GL Rules for Stowage and Lashing of Containers, Annex C – “Container Lashing Fittings” – sets out a new standard for operational tests for fully automatic locks. The specified requirements comprise test setup, loading scenario and test forces for compression, racking and lifting.

GL’s Structural Rules for Container Ships have undergone major amendment, including the following changes: Section 8 “Bottom Structures” introduces an entirely new sub-section – “D” – which specifies structural requirements for transverse thrusters. In Section 14 “Rudder and Manoeuvring Arrangement”, as well, a new sub-section – “H” – has been added covering “devices for improving propulsion efficiency”. Section 17 “Hatchways” has been extensively revised due to the new IACS Unified Requirement S21A “Evaluation of Scantlings of Hatch Covers and Hatch Coamings and Closing Arrangements of Cargo Holds of Ships”.

GL has also released the first comprehensive set of rules for the classification of Crew Boats and Offshore Wind Farm Service Craft. These rules have been developed by bringing together, for the first time, all of the relevant GL rules and the international codes and recommendations which can be used for the classification of Crew Boats. The rules will allow designers to develop vessels built to the special needs of clients according to the Rules with full confidence in the fact that their vessel can meet with classification approval.

IMO Calls Heads of State to Engage with Global Fight Against Piracy

International Maritime Organization secretary-general Koji Sekimizu has called on heads of state to engage with the global fight against piracy, saying that ministerial discussions have failed to deliver the political will needed to tackle the problem effectively.

Addressing a shipping industry event at which participants voiced frustration about soaring levels of piracy since 2008, Mr Sekimizu said that the way forward for the UN body was to debate the issue at national government level.

“I can share the frustrations,” Mr Sekimizu said. “The IMO is talking to as many governments as possible at as high levels as possible.

“If we raise the issue to the top of the government, instead of the ministerial level, that may generate political will to solve the problems.”

Most national governments have restricted discussion of their counter-piracy measures to ministerial level, leading many within the shipping industry to criticise the European Union, the UN and the US for lacking political will to fight pirates, especially in Somalia.

Governments should put in more effort to solve piracy issues, as shipping is critical to the global economy, said Mr Sekimizu, as he urged governments to consider the safety of “over 1.5m seafarers, working day in and day out”.

Next month, the IMO will hold a conference to discuss measures to counter piracy off Somalia.

Talking points will include use of armed guards, information sharing, law-enforcement training and national legislation to combat piracy.

In particular, the IMO hopes to develop guidance for deployment of private maritime security firms as many countries are seeking to regulate use of armed guards.

Mr Sekimizu, who assumed his post in January, said he hoped member states and the European Union would attract high-level participation to move things forward.

“I hope those conferences will end in good results,” he said.

Ice Book Warmly Received

The Nautical Institute has launched Polar Ship Operations aimed at providing a comprehensive easy reference book for seafarers, shipowners and others who are planning to operate in that extreme environment. There has been an increase in activity in the polar regions recently as the maritime and offshore industries respond to global warming and the need to find more sources of energy.

However, as author Captain Duke Snider FNI explained, these regions used to be the domain of experienced operators and vessel owners.The Nautical Institute seeks to fill a gap in reference material available to these novice polar ice navigators and supports the Institute’s efforts in helping to establish uniform international standards for ship bridge personnel in ice operations.

Having identified a gap in the international standards, The Nautical Institute started work on the Ice Navigator Project, the aim of which is to assemble the background knowledge that exists, fill gaps that may be present, and present a globally acceptable standard of ice navigator along with a template of skills, knowledge and competencies. Captain Snider said that the book will help those encountering multi-year or old ice and glacial ice, which is much harder than first year ice encountered in subpolar regions. “As global climate change has resulted in an increase interest in shipping in Polar Regions, such a reference gap is of paramount importance.

Polar Ship Operations addresses this gap in reference material.Captain Snider is a highly qualified ice navigator with extensive experience in the Arctic as a career officer of the Canadian Coast Guard. He has commanded icebreakers and offshore research vessels and sailed as an ice pilot on numerous vessels.The book is laid out to familiarise the reader with the geographic, climatological and meteorological aspects of the Arctic and Antarctic; to explain the remoteness of these regions and the lack of support infrastructure. Other chapters cover the physics of ice formation and basics of ice interpretation and reporting, offering help to identify old and glacial ice, the preparation for operating in these regimes and ship handing in polar ice conditions. In his Foreword, Rear Admiral Nigel S Greenwood CMM CD RCN MNI of the Canadian Navy said the polar regions are “paradoxically” both dangerous and vulnerable. They are very susceptible to pollution or even the disturbance of transit and provision of assistance is “incredibly sparse” so the areas demand “the epitome of self sufficiency.”And he added: “The polar regions thus remain a false lure for the uninformed and a trap for the unwary.”The book was launched at the 8th annual Arctic Shipping Forum held by Informa in Helsinki, less than two weeks after a report on the development of the Arctic from Lloyd’s of London and Chatham House. It predicted that an estimated $100 billion would be invested in activities in the region over the next ten years.Shipping is bound to be a beneficiary of this activity, and The Nautical Institute believes that it calls for specialised skills and competencies which this book, the latest of its practical guides, will support. Source : ShipTalk

Polar Ship Operations is available from The Nautical Institute price: £30; ISBN: 978 1 906915 18 6 www.nautinst.org/pubs 

Cruise Industry Announces Three New Safety Policies at EU Conference

On behalf of the global cruise industry, Cruise Lines International Association (CLIA) and the European Cruise Council today announced that the cruise industry has adopted three new safety policies which are to be implemented with immediate effect.

The announcement was made by Chairman of the European Cruise Council (ECC) and Member of the CLIA Executive Committee, Manfredi Lefebvre.

Speaking at a major European Commission-organized Passenger Ship Safety event in Brussels, he outlined how these policies have been agreed to by the industry and represent the third such announcement arising from the cruise industry’s Operational Safety Review.

These three new policies, which go beyond even the strictest of regulatory requirements, address issues related to passage planning, personnel access to the bridge and lifejackets. Each of these three policies will be reported to the United Nations’ International Maritime Organization (IMO) for consideration at their next session in May.

“As highlighted by these wide-ranging policies, we continue to take proactive measures to improve the safety of passengers and crew across the globe,” saidChristine Duffy, president and CEO of CLIA. “We look forward to working collaboratively to identify any additional operational issues that will achieve our longstanding goal of continuous improvement and innovation in shipboard operations and safety.”

The three policies govern:

1) Passage Planning – Although cruise lines have followed IMO guidance on passage planning for many years, our policy now deems this to be a mandatory minimum requirement and enhanced by endorsement of the best practices contained in the International Chamber of Shipping’s Bridge Procedures Guide. Furthermore, under this policy each passage plan is to be thoroughly briefed to all bridge team members well in advance of its implementation and it is to be drafted by a designated officer and approved by the master.

2) Personnel Access To The Bridge – To minimize unnecessary disruptions and distractions on the bridge, we have adopted a policy that bridge access is to be limited to those with operational functions during any period of restricted manoeuvring or when increased vigilance is required.

3) Lifejackets – In addition to the statutory requirement of carriage of lifejackets for each person onboard, we have adopted a policy of carrying additional adult lifejackets onboard each cruise ship in excess of these legal requirements so that the number of additional adult lifejackets to be provided must not be less than the total number of persons berthed within the ship’s most populated main vertical fire zone. This ensures that the number of lifejackets carried is far in excess of the number of persons actually onboard the ship.

These policies were reviewed by CLIA’s recently-announced panel of outside maritime and safety experts who are evaluating suggested policy improvements as part of the association’s continuous efforts to review and improve safety measures by developing comprehensive best practices for industry-wide implementation and ultimately, formal submission to the International Maritime Organization, as appropriate.

Manfredi Lefebvre said: “Today’s European Commission event is in perfect alignment with our industry efforts to improve cruise ship safety. I am pleased to be given a chance by European Commissioner VP & Transport Commissioner Siim Kallas to outline how the industry and the regulators can move forward together in our common goal of preventing future accidents.”

He added: “The cruise industry is highly regulated and it is this regulatory regime, complied with onboard by our professional and committed officers and crews, that has given the cruise industry a truly remarkable safety record. But as the Concordia incident demonstrates, there is no such thing as perfect safety. We do strive for a perfect commitment to safety. And as part of our commitment to a safety culture, the industry — both individually as cruise lines and collectively through CLIA and the ECC — beginning January 27 launched an Operational Safety Review to learn the lessons from Concordia and to conduct a top to bottom safety review.”

He continued: “By bringing forward voluntary initiatives such as these, we significantly and immediately improve safety standards. These initiatives are, we believe, fully supportive of the Commission’s goal of re-launching their ‘Quality Shipping Campaign’ through voluntary partnership agreements with the shipping industry as set out in its Maritime Policy 2009-2018. Specifically, we very much hope that the results of the Operational Safety Review as they are delivered over the coming months will give us fertile ground to grow our partnership with the Commission”

He concluded: “We are convinced that this approach will achieve concrete, practical and significant safety dividends in the shortest possible time and fully reflects the measured and responsible progress on future safety initiatives by both the Commission and European Parliament following the Concordia tragedy.”

The new policies follow the industry’s announcement on January 27 of an Operational Safety Review in response to the Concordia incident and as part of the industry’s continuous efforts to review and improve safety measures, and represent the third such announcement. The previous two related to the new Muster Drill Policy (February 9, 2012) and Enhanced Reporting Requirements to Ensure Consistency, Transparency of Marine Casualty Data (March 21, 2012).