Four issues to watch out for at IUMI 2014 - 22/09/2014

Four issues to watch out for at IUMI 2014

Leading lights of insurance offer their expected highlights of the annual meeting

DURING the coming week the International Union of Marine Insurance will meet for its annual convention, this time in Hong Kong.

As an association of 48 national associations this annual event, which will attract about 500 participants, is perhaps the single most important date in the insurance calendar.

Insurance is the backbone of shipping; from it has sprung the various aspects of risk and assurance that form the classification societies, international shipping regulation and even this esteemed news source, Lloyd’s List.

During the week Lloyd’s List Finance and Insurance editor David Osler is in Hong Kong following proceedings and reporting events as they happen.

Here are his four main focus points that will form the key themes of IUMI2014.

 

(1) Articles of Association

IUMI members will be drawing up a new set of articles of association while in Hong Kong. A draft, which has been widely seen by members, will be put to a vote early in the week.

While consensus is expected, the importance of this new document should not be ignored.

“When IUMI was incorporated in Switzerland, the terms of reference were very, very short and there was very little transparency in the way the executive committee operated and in the decision-making process for IUMI,” argues Neil Smith, head of underwriting at the Lloyd’s Market Association.

“A lot of the association secretaries felt disenfranchised with the way things worked. So as part of this modernisation, one of the things we wanted to do was to change that process, so that the structure and composition of the executive committee was much more transparent, so that the decision making processes moved from the executive committee back to the IUMI membership.”

Lars Lange, IUMI’s secretary-general, adds: “This means we want to be even more compliant, more transparent, more modern. We have new rules, for example, for our technical committees, limiting tenure of members to four years, although you can be re-elected.”

 

(2) ‘More political and more visible’

REGULATORY issues increasingly impinge on the world of marine insurance, and IUMI has adopted the slogan “More political and more visible” to emphasise the need to make its voice heard by the politicians and the bureaucrats.

Matters of concern include seafarer training, cruiseship safety, containership stability after MOL Comfort, firefighting at sea and places of refuge.

The IUMI website publishes a so-called “current issue list”, updated every three months, which at this time runs to 18 topics.

As part of a drive to ensure IUMI is listened to, Mr Lange is also pledged to greater openness, including more contact with the media.

“We are currently discussing our communications strategy and how to improve it in future. As a trade association, you always want to find more visibility, of course,” he said.

Andrew Bardot, executive officer of the IUMI-affiliated International Group of P&I Clubs, commented: “IUMI definitely needed to ramp up their profile and I think they have been doing that very effectively.

“There’s a lot they can do by being more engaged. Yes, they can be more political. Yes, they can be a stronger voice in bodies like the International Maritime Organization. I think it has been a positive development.

“More political? Yes. Tackle the big issues that are going on, and lobby on them. And that is exactly what they are doing.”

 

(3) The rise of Asia

MARINE insurance has historically been — and let’s be honest, pretty much remains — a eurocentric business. Lloyd’s is still the world’s biggest hull market, and 11 of the 13 International Group P&I Clubs are based in Europe.

However, Asia has been rising rapidly over the last decade or so, and is already responsible for 20%-30% of the cargo market. What’s more, around one in 10 of the participants in the IG’s reinsurance programme hails from the Far East.

Developments such as these indicate why it was decided to hold the IUMI conference, which had adopted the theme of “Building Expertise in a Changing World’, in Hong Kong this year.

“It was very important to us to see that we get as much as possible domestic speakers on issues related to Asian markets,” Mr Lange said.

“When you look at the programme you will see that many of the workshops have a close focus on Asian business, trying to understand how the business works, where the challenges are, where the problems are.

“Hong Kong has a special situation. Hong Kong has a challenge nowadays from Shanghai and other Chinese markets. China is certainly aware of this strong power that Hong Kong has in economic terms.”

The LMA’s Neil Smith concedes: “[IUMI is] still a eurocentric organisation, because of its history. You don’t have to be a rocket scientist to realise that our client base, geographically, is changing significantly.”

IUMI cannot be seen as a bunch of Europeans running European committees, Mr Smith argued, and proving its relevance to the rest of the world will be a challenge going forward.

 

(4) Places of refuge

RECENT casualties have highlighted the need for clarity on places of refuge. Most marine insurers believe that IMO guidelines offer the right way to go about the issue of stricken ships. The trouble is, governments remain reluctant to observe them.

“Look at it from the perspective of states, who are faced with decisions, or the challenges facing shipowners and insurers,” said Mr Bardot.

“There have been suggestions that there should be new conventions and things, which have never gained any traction and which would be very much a blind alley in our view.

“The message we have to get across to states is that there is a set of guidelines issued to the IMO and they should be applied in each and every case.”

in www.lloydslist.com 20/09/2014

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