Dex believes shipowners are looking for insurance stability

More and more shipowners would like to see greater long term stability in the marine hull & insurance market.

Following a few years when rates were close to "feast" proportions for underwriters and insurance providers, they have fallen more recently to "famine" level. However, there are signs that they are bottoming out and that substantial increases lie ahead. In particular, owners currently enjoying the benefits of extended lock-in deals can expect the market to be significantly more demanding with premium levels moving up sharply.

It follows that a rising market should provide the foundation for a more constructive approach to hull & machinery insurance, involving greater shipowner participation.

This perspective of the hull and machinery insurance market is taken by Peter Wright, Chief Underwriter at Chartwell Managing Agency's Syndicate 2241, which provides capacity for the Dex operation, formed in 1999 to provide a service-oriented approach. Writing in the TopDex newsletter, Mr. Wright poses the question: 'Can anything be done to contain these fluctuations and provide a greater level of stability to both insurance providers and the shipowning community?'
He believes that the whole Dex undertaking is an expression of confidence that it can.

Dex is keen to accept a much greater proportion of the risk for suitable quality fleets than is traditional for Lloyd's syndicates and insurance companies in the marine market. This approach is enhanced by a very sophisticated rating model, utilising data on vessel type, age, flag and class, which draws on many years of hull business experience from the former Chartwell Syndicate 741.

The model is reinforced by thorough research into potential customers, taking into account management, crewing, training, maintenance records, port state control, cargoes and trading patterns. The net result is a sophisticated quotation process which also provides clear indicators of the particular services required by shipowners.

In the past 18 months, members of Dex have visited many owners and brokers and found widespread enthusiasm for the Dex product and services offered.

Mr Wright concludes:

"We know we cannot compete on price alone. We will not cut what we believe to be reasonable rates just to add names to our books. We have seen and reluctantly declined a large amount of quality business likely to be unprofitable at current rating levels and will continue to do so. We would wish to be judged on the long-term level of pricing and the service we provide.

"There is no doubt that for quality owners, who take a long term view of managing their insurance costs, Dex has a great deal to offer."

The second issue of TopDex also contains articles on mediation by Rhys Clift of Hill Taylor Dickinson, machinery failure claims by Simon Groves of Richards Technical Services and a review of the Dex operation in Asia Pacific by regional marketing manager Roman Reut.