Due to Hurricane Florence and the safety of our staff, we will be closing our Charleston office starting today at noon, Tuesday, September 11th through Friday, September 14th and intend to reopen on Monday, September 17th.

Please note that even though your specific customer service representative may be unavailable, if you have a question regarding your account, feel free to reach out to us at 1.800.ROANOKE (1.800.762.6653) or by email at infospot@roanokegroup.com.

Munich Re Specialty Group Ltd. (MRSG) of London is pleased to announce two additions to lead its expanding underwriting team. Steven Weiss has assumed the role of  Senior Vice President/Chief Underwriting Officer of Ocean and Inland Marine Insurance; Ben Tucker had been appointed Senior Vice President/Chief Underwriting Officer of Specialty Insurance including Cyber, Terrorism/PV and Financial Lines.

Mr. Weiss and Mr. Tucker will report to John Hennessy the newly appointed CEO and President of Roanoke Group Inc. (RGI) who is charged with leading the expansion of MRSG’s underwriting platform in the Americas.

Through Munich Re Syndicate, MRSG has been providing marine and specialty offerings to insurance brokers in North America for decades from its home-base in London. Roanoke Group Inc., is a whole owned subsidiary of MRSG and is the parent and holding company of Roanoke Insurance Group Inc. In addition to Roanoke Group, MRSG owns Munich Re Syndicate Limited, which manages Syndicate 457 at Lloyd’s, and a network of distribution companies including GJW Direct, NMU Specialty, RIBL as well as Syndicate offices in Asia Pacific and the Middle East.

 

The fire on Danish shipping vessel, Maersk Honam, underscores the extent of damage that can occur on large shipping container vessels – both in human life (five crewmembers died) and in cargo damage. Maersk Honam declared General Average (GA) only a few days after the fire. Liverpool-based average adjuster Richards Hogg Lindley (RHL) set the salvage security in the amount of 42.5% of the CIF (cost, insurance and freight) value of the cargo and an additional 11.5% required as GA security. This means that a shipper with goods worth $100,000 in a container aboard the Maersk faces a combined General Average and salvage security bond bill of $54,000 to have the cargo released.

Just to recap, the principle of General Average requires all parties in a sea venture to proportionally share any losses under certain circumstances, which include when there is a fire on board, the ship gets stranded or grounded due to machinery breakdown, there is a stack collapse on board a container ship, the ship gets caught in heavy weather and some cargo on board the ship has shifted due to the heavy weather jeopardizing the stability of the ship, or any other life-threatening situation caused by natural or unnatural circumstance.

Now that the Maersk Honam is berthed at the Port of Jebel Ali, it has finally received its cargo discharge operations with the first containers having been cleared for onward transport. MSC, Maersk Line’s 2M partner, said, “The submission of the GA and salvage securities is a prerequisite for the cargo to be released from Jebel Ali. Following completion of the discharging operations, the containers identified as potentially damaged will undergo an inspection at Jebel Ali and relevant customers will be invited to be represented at a joint inspection. Containers that are identified as sound will be loaded at first opportunity to reach their final destination provided GA and salvage securities have been submitted, released, and confirmed by RHL.”

The Maersk Honam GA declaration serves to highlight the importance of Cargo insurance to address the risks of financial loss in the global supply chain. Most notably, cargo insurance will respond to the cost of GA security payments and facilitates a faster release of a shipper’s cargo.

Roanoke Underwriting specializes in helping insurance agents and brokers secure commercial marine insurance solutions for global trade and logistics risks. For more information about our portfolio of products, including Worldwide Marine Cargo coverage, please contact us at 1.800.762.6653.

Steven WeissWe are pleased to announce another great addition to our corporate management team, Steven P. Weiss. Mr. Weiss has assumed the position of Senior Vice President-Chief Underwriting Officer, effective January 2018. Steven’s background includes 28 years as a Marine Surveyor, Loss Adjuster and Underwriter and he is a graduate of Virginia Military Institute with a masters in insurance from Boston University.

Steven has nothing less than expert knowledge in this industry and has consulted as a critical witness on many aspects of Marine transportation and liability claims and has coordinated difficult logistical projects. Prior to joining Roanoke, Steven was a SVP at Aspen Insurance and Liberty International Underwriters and most notably owned his own company; Marine and Energy Surveying and Adjusting in Houston, Texas.

Mr. Weiss currently serves and is Chairman of the Board of Directors for the Houston Marine Insurance Seminar, Immediate Past President of the National Association of Marine Surveyors and the Chair of the AIMU Loss Control Committee. He also previously served for 5 years with the U.S. Navy as a deck officer in the defense of our country.

Roanoke Underwriting specializes in helping agents and brokers secure commercial marine insurance solutions for global trade and logistics risks. For more information about our portfolio of products, please contact us at 1.855.213.4545.

Earlier this month, an ultra-large containership belonging to shipping giant Maersk suffered what is being described as a ‘serious fire’ in one of its cargo holds while en-route from Singapore towards Suez, Egypt. Of the 27 seafarers aboard the Maersk Honam, three have died and one is missing as of this publication date.

This recent fire reignites longstanding industry concerns over the severity of fires on these large container ships, particularly since the Maersk Honam is relatively new. It was built in 2017 at Hyundai Heavy Industries shipyard in South Korea, is valued at $122 million, and has a nominal capacity of 15,262 TEU (twenty-foot equivalent unit).

According to an article published in Seatrade Maritime News, numerous insurers have issued warnings over the challenges of containership fires over recent years. “With temperatures reaching in excess of 500 degrees centigrade inside boxes, extinguishing the blaze is both extremely difficult and dangerous, and the fire can easily spread to other containers and the ship as a whole,” cites the article.

The Maersk Honam tragedy is similar to a fire aboard the MSC Flaminia in the Atlantic in July 2012 that claimed the lives of three crewmembers – two confirmed dead, and one missing. The insurance costs for both the vessel and cargo can be huge and far out of proportion of the number of claims caused by fire, notes Seatrade Maritime News. In fact, just 0.76% of cargo claims are due to fire, yet in terms of total costs of claims fire relates to some 28%. The Maersk Honam had 7,860 containers, equaling 12,416 TEU, on board at the time of the fire.

On the Heels of the Fire

According to Lloyd’s Loading List, Maersk has declared general average (GA) for the stricken Maersk Honam containership, with the British International Freight Association (BIFA) stating the insurance industry is bracing for hundreds of millions of dollars in claims from the fire. The U.K. trade body also confirmed that cargo owners have been advised of Maersk’s decision to declare GA.

In addition, BIFA noted that based on the evidence of images from the Indian coastguard, hundreds of containers in the fore section of the containership would seem to be a total loss, but boxes stowed behind the superstructure and in the aft section appear intact.

The cause of the container fire is currently under investigation. However, some BCO representatives suspect that the use of containerized cargoes of calcium hypochlorite, a disinfecting and bleaching agent with a tendency for self-ignition, may be behind the fire. Maersk in 2010 and 2015 said it would not accept these types of containers, however, the BCO reps suspect that perhaps misdeclared containers of this compound were responsible for the blaze. Maersk said in a statement a week after the fire that it was too soon to conclude whether the fire was caused by dangerous goods, and the line is said to be investigating cargo contents and manifests. 

Roanoke Underwriting specializes in helping agents and brokers secure commercial marine insurance solutions for global trade and logistics risks. For more information about our portfolio of products, please contact us at 1.855.213.4545.

Sources: Seatrade Maritime News, Lloyd’s Loading List, Maritime Executive

The international shipping organization BIMCO, based in Copenhagen, sees 2018 as the year container shipping growth and demand growth strike a balance, according to an article in American Shipper. “BIMCO forecasts demand to grow by 4.0-4.5 percent against a fleet growth of 3.9 percent in 2018,” stated Peter Sand, chief shipping analyst for BIMCO.

Sand also believes that our ports on the East Coast will see increasingly more ships as carriers leverage the new locks at Panama Canal, which opened in June 2016. “For the whole of the U.S. East Coast in 2017, the amount of inbound loaded containers grew by 10.1 percent,” Sand said in the American Shipper article. “It took the industry a while to embrace the expanded Panama Canal locks – but they are making use of them now. 2018 is likely to be the year where many container line networks calling the U.S. East Coast will become fully up-scaled by deploying ultra large containerships.” He also commented that we have yet to see the full impact of the elevated Bayonne Bridge, which enables mega containerships to enter into the New York/New Jersey port. The Bayonne Bridge is an arch bridge spanning the Kill Van Kull connecting Bayonne, New Jersey with Staten Island, New York City. The bridge was raised to 215 feet to allow for larger, more efficient ships.

In related news, imports rose steadily at the nation’s seaports in January, as U.S. retailers and manufacturers restocked after the holidays and Chinese suppliers stepped up shipments for the annual two-week factory shutdown during the Lunar New Year. U.S.-bound ocean shipments increased nearly 7.7% across all of the nation’s seaports in January, according to research firm Panjiva Inc. This is on the heels of a record-setting year for import shipments to the U.S., which rose 4.1% in 2017 from the prior year as the nation’s trade deficit expanded to $566 billion, its widest in nine years.

“That’s a direct reflection of the overall level of activity in the economy and our continued engagement in international trade,” said Paul Bingham, a trade economist with Economic Development Research Group, in an article in the Wall Street Journal. “Consumers are still buying goods made overseas and so are businesses.”

Roanoke Underwriting specializes in helping agents and brokers secure commercial marine insurance solutions for global trade and logistics risks. For more information about our portfolio of products, please contact us at 1.855.213.4545.

Sources: American Shipper, Wall Street Journal

Global insurer Munich Re, parent company of Roanoke Underwriting, earlier this month released a review of 2017’s natural catastrophes. Hurricanes Harvey, Irma and Maria, along with Mexico’s severe earthquake and other disasters, are estimated to cost the insurance industry a record $135 billion. Add to this uninsured losses, and the cost for overall losses is at $330 billion, the second-highest figure ever recorded for natural disasters, cites Munich Re.

“This year’s extreme natural catastrophes show how important insurance is in absorbing financial losses in the wake of such disasters,” said Torsten Jeworrek, Munich Re Board member responsible for global reinsurance business. “Munich Re is willing to develop this business further – we have the necessary capacity and expertise. For me, a key point is that some of the catastrophic events, such as the series of three extremely damaging hurricanes, or the very severe flooding in South Asia after extraordinarily heavy monsoon rains, are giving us a foretaste of what is to come. Because even though individual events cannot be directly traced to climate change, our experts expect such extreme weather to occur more often in future.”

Inside U.S. Losses

Following are several of Munich Re’s findings from last year’s losses as they relate to the U.S.:

  • The share of losses in 2017 for the U.S. was 50% compared to the long-term average of 32%.
  • Hurricane Harvey, a Category 4 storm that hit the Houston area, is responsible for overall losses of about $85 billion, making it the costliest natural disaster of 2017.
  • In September, Hurricane Irma, a Category 5 storm, destroyed the Caribbean before hitting the Florida Keys and then making landfall on the southwest coast of Florida. While Florida experienced moderate losses, Hurricane Irma ended up being the costliest natural disaster for insurers in 2017, with insured losses of around $32 billion.
  • Hurricane Maria slammed the island of Puerto Rico, a U.S. territory, on September 20 as a Category 4 storm. Production facilities, including those used to manufacture pharmaceuticals, were affected. Infrastructure on the island was almost totally crippled. Many, in fact, have been living without power for four months and are just now coming back on the grid. As of mid-January, 40% of the island is still without power.
  • Severe thunderstorms last spring, with accompanying tornadoes and hail, also contributed to the heavy U.S. losses. No less than five tornado-hail outbreaks caused insured losses in excess of $1 billion each.
  • Northern California’s wildfires in October resulted in overall losses of $10.5 billion, with insured losses expected at about $8 billion.

Lessons Learned

The most significant takeaway in the aftermath of these events, cites Tony Kuczinski, President and CEO of Munich Re, U.S., is the importance of mitigation and improved risk management, as evidenced by the stronger building codes adopted in Florida, which “can work to reduce losses and promote safety.” Another takeaway is the continued substantial insurance gap that exists – “even in a highly developed market like the United States where, for example, the vast majority of home and small business owners do not purchase flood insurance,” notes Mr. Kuczinski. “Our industry’s risk expertise, capital strength, and claims-handling infrastructure are critical to finding meaningful solutions, and Munich Re is an active participant in the public-private partnership that seeks to offer more Flood insurance options and promote flood protection.”

About Roanoke Underwriting

Roanoke Underwriting specializes in helping agents and brokers secure commercial marine insurance solutions for global trade and logistics risks. For more information about our portfolio of products, please contact us at 1.855.213.4545.

Improving freight conditions and freight rates in 2017 is expected to lead to a rebound in carrier profitability in 2018 as well as a jump in new big rig orders by trucking companies, according to ACT Research, publisher of commercial vehicle (CV) industry data, market analysis and forecasting services for the North American market.  Trucking firms, cites ACT, ordered 32,900 Class 8 trucks, those used on long-haul routes, in November, up about 70% from a year earlier. They ordered 35,700 Class 8 trucks in October, a 62% increase from September and a 167% increase compared with the same month a year earlier, according to FTR Transportation Intelligence.

Fleets are adding capacity as strong economic growth fuels surging volumes of freight through the nation’s transportation networks. Trucks are in high demand to carry record imports from ports to distribution centers, move machine parts and heavy goods for manufacturers and merchandise during the holiday shopping season, according to a recent article in the Wall Street Journal (WSJ). Shippers are paying higher rates as capacity tightens, driving incentives to put more trucks on the road.

“We’re seeing a lot of volume…and rates are following suit,” said Eric Fuller, chief executive of trucking company U.S. Xpress Enterprises Inc., in the WSJ article. “I think with increased rates people are feeling a bit more comfortable buying additional trucks.”

Additionally, as trucking firms tend to reserve new trucks from manufacturers in the final months of the year, the surge in orders portends that the industry expects the market to continue booming well into into 2018.

A majority of the big-rig orders is also coming from replacing older trucks, according to Stifel Financial Corp. analyst Michael Baudendistel. He projects the industry will build about 280,000 trucks next year, a 12% increase over the pace of this year. ACT analyst Kenny Vieth estimates 2018 orders at 322,000, saying that some manufacturers are offering deals on new rigs to gain more business as the market improves.

With new big-rigs set to take to the road, the real challenge for the transportation industry is finding enough drivers. The transportation sector has been struggling to find enough qualified drivers over the last few years due to a number of reasons, including demographics (aging population), regulations and lifestyle – the fact that truckers are away from home for long periods of time.

Roanoke Underwriting specializes in helping agents and brokers secure commercial marine insurance solutions for global trade and logistics risks. For more information about our portfolio of products, please contact us at 1.855.213.4545.

Sources: WSJ, Truck.com, ACT Research

Four industry organizations representing different sectors of the supply chain industry in a recent session at the Intermodal Europe Conference in Amsterdam put the spotlight on the need for container owners and operators to provide appropriate equipment for properly packing and shipping cargo, as set by the Cargo Transport Units (CTU) Code. The Global Shippers Forum (GSF), ICHCA International, TT Club, and the World Shipping Council (WSC), according an article in the Maritime Executive, have been working together for some months to improve safety through a focus on cargo integrity. The group’s goal is to bring greater awareness on the use of the IMO-endorsed CTU Code by all those involved in the shipping process.

The CTU Code calls for effective interaction between the shipper, which is responsible for providing requirements on the type of equipment appropriate to carry intended cargo, and the container operator in providing units that satisfy such requirements, meet applicable safety and manufacturing standards, and are clean. Faulty and badly maintained units may have as serious ramifications as incorrect and deficient packing of cargo inside the units.

“Engagement with governments and industry groups representing the diverse mix of supply chain stakeholders is one of our primary goals,” said TT Club’s Peregrine Storrs-Fox. “Through communication and understanding of the safety issues comes a wider implementation of the CTU Code and other best practices aimed at cargo and environmental safety.  To this end we urge regulatory and advisory bodies as well as associations to unite with us in spreading the good word.”

The industry group has been working with the IMO on the CTU Code and other regulatory recommendations, but concerns remain that governments may not effectively be communicating agreed IMO requirements and advisory information within their jurisdictions. “Although the IMO agreed to amend SOLAS to require a verified gross mass of packed containers as a condition for vessel loading, government enforcement of the regulation may be uneven,” explained Lars Kjaer of the WSC, in the Maritime Executive article. “We want to make sure that governments as well as industry are promoting the CTU Code and its best practices to all parties in the CTU supply chain around the globe.”

The group is committed to communicating the need for standard cargo safety standards to all stakeholders involved via governmental and industry events and linking with other organizations that can assist in promoting its widespread adoption.

Roanoke Underwriting specializes in helping agents and brokers secure commercial marine insurance solutions for global trade and logistics risks. For more information about our portfolio of products, please contact us at 1.855.213.4545.

Sources:  Maritime Executive, Dive