The Association for Marine Underwriters in South Africa (AMUSA) Chairman’s Report 2009

During the period under review, the committee was unchanged and met every month without fail.

Coastal committees

The Correspondents in Durban, Port Elizabeth and Cape Town provide invaluable quarterly feedback to the executive. Thank you, particularly to Chris Pyke in Port Elizabeth for his regular, comprehensive reports.

Liaison with surveyors

The surveyor liaison meetings are held every two months and we met six times in the period under review. The information provided by our surveyors and recovery agents, who take time out of their busy schedules to attend, is of great use to the marine and non-marine members. Regular attendees with solid input, other than the surveyors, include representatives from Transnet Freight Rail (Spoornet to you and me) and the Financial Intermediaries Association (FIA).

Statistics

To provide our marine colleagues with meaningful statistics, we have created a new sub-committee, that of Facts and Figures. Following international trends set by the International Union of Marine Insurers (IUMI) we hope to give our members information to better understand the risk environment they operate in and hopefully allow informed underwriting decisions. After canvassing the market, we received a good response from members confirming their willingness to provide information.

Education

AMUSA, via its education committee, is heavily involved in the “Fit and Proper 2009 and Beyond” requirements. Our chair, Frank Ponnen, attended the last Financial Services Board road show presentation, which explained the proposed qualification requirements post 2009. The immediate focus is for individuals to obtain the minimum requirement of 60 credits by December 2009, as there will apparently be no further extensions.

The qualifications thereafter will be categorised into First and Second Level Regulatory exams, which must be attained within a prescribed period. These exams seem not to be the “end all” for insurance practitioners as, over a three- year period, they will have to accumulate between 15 and 60 hours of “Continuous Professional Development (CPD)” which simply means that we will have to keep up to date with relevant industry legislation, news and trends.

Specialist areas such as marine will likely be allowed to input limited course material to these qualifications. It is AMUSA’s intention to ensure that any subject material or exam questions provided are correct, factual and relevant to the marine insurer on the street.

Commercial hull

The market has been stable over the last twelve months with a pleasing lack of rate cutting and questionable policy extensions. Some of our more prominent accounts fled overseas for precisely these reasons and after two years of disastrous results are returning to our shores. Hopefully, a good sign, though local underwriters need to be wary of not making the same mistake of chasing premium rather than profitability.

Maritime hijack aka piracy

Piracy in the Gulf of Aden has pushed the number of marine hijackings to record levels this past year.

The International Maritime Bureau (IMB) Piracy Reporting Centre confirmed there were 293 incidents of piracy against ships worldwide, up more than 11% compared to the previous year.

In the period under review, 49 vessels were hijacked, 889 crew taken hostage and a further 46 reported being fired upon. Thirty two crew members were injured, 11 killed and 21 missing, presumed dead.

There were 111 incidents reported on the east coast of Somalia and the Gulf of Aden, a 200% increase on the previous year.

Nigeria ranked second with 40 reported incidents, including 27 vessels boarded, 5 hijackings and 39 crew members kidnapped.

South Africa’s trade partners are mainly the UK, Europe and the USA, and this indicates very little South African owned/insured cargo will transit through these hazardous waters.

Legal opinion obtained by AMUSA confirmed that ransom fees could quite possibly be considered as a General Average contribution.

Technical

The proposed Maritime Law Act has seemingly fallen away and little progress is expected in the short to medium term.

However, recently this committee found itself in consultation with government officials to assist in providing information for a presidential paper on hijackings and piracy along the coast of Somalia and in the Gulf of Aden.

Small craft

Jet skis continue to be high-risk items. The Merchant Shipping Act (National Small Vessels Safety), which regulates boat users, is being implemented but its impact in terms of river/water safety is still to be seen.

International Union of Marine Insurers (IUMI)

The 2008 Vancouver conference was attended by six AMUSA delegates. South Africa may be a small market in terms of percentage of world premium but our input is always officially recognised.

AMUSA successfully hosted the IUMI Executive Spring meeting in May last year and my thanks go to the companies that supported the South African Marine Market.

Following the good impression left on the IUMI Executive, AMUSA has been approached to consider hosting the 2018 conference. It would be the first time in its 150-year history that IUMI comes to Africa!

Member response, at least from the larger marine players, was very positive, and having confirmed our interest, we now await IUMI’s decision.

Appreciation

Finally my thanks go the Executive Committee members for their support and input.

Thanks to Barry Scott and Elsebe Vetten and all the other SAIA members for their support during the year.

Once again, I would like to thank the surveyors and recovery agents who attend the liaison meetings for their input.

Finally my thanks go to last year’s Chairman, David Keeling, whose advice and knowledge have been invaluable in my first year.

Paul March
Chairperson: AMUSA