Fire ClaimsThe Cause & CostAn Insurers ViewKarl LumbersLondon13th March 2003: Fire Claims The Cause & Cost An Insurers View Karl Lumbers London 13th March 2003


Slide2: Source of Data Overview of large cargo claims Cause of large fire cargo claims Risk Profile


Data : Data Source Claims Files Criteria 100,000 usd Cargo Liabilities Period 15 years Sample size 68 No 59$m Value 2002


Slide4: Fire costs the industry over 20$m (Est) in large cargo claims a year


Cause of Large Cargo Claims: Cause of Large Cargo Claims


Cause of Large Cargo Claims: Cause of Large Cargo Claims 9th by No 2nd by Value


Large Fire Cargo Claims Average Claim Value: Large Fire Cargo Claims Average Claim Value


Type of Cargoes Involved: Type of Cargoes Involved


Large Fire Claims by Value: Large Fire Claims by Value 6 x 1$m +


Risk in Insurance Terms: Risk in Insurance Terms Risk = Frequency x Consequence Fire Risk = Low/Medium(4.5) x High (860,000usd)


What Causes Fire Claims: What Causes Fire Claims Software Failure or Hardware Failure


Slide12: “To err is human, indeed it is the cause of most of Our misery. Invariably though it is to the gods that we look for remedy” Livy


Slide13: “ Human Error is the cause of most of our misery and it is to the clubs that we look for reimbursement”


Software v Hardware Failure: Software v Hardware Failure


Human Failure: Human Failure High proportion of shore side input


Origin of Large Cargo Claim Fires (Where known): Origin of Large Cargo Claim Fires (Where known)


Slide17: One of our most common findings !!!! Daily Use Tank Glass replaced with plastic tube Deadman lashed in open position 2002


Slide18: Fuel Oil DB Tank - Sounding Pipe 2002


Slide19: Sophisticated Cabin Heating !!!! Note paper to protect deck 3/2003


Slide20: Plain Language !!!!! 2002 2002


Slide21: Before After Tragic Consquences - 3 Deaths 2001 2000


What Contributed to the Fire(Where known): What Contributed to the Fire (Where known) Fishmeal Tobacco Cotton Woodpulp Coal


What Type of Ship has Fires: What Type of Ship has Fires $m


What Type of Ship has Fires: What Type of Ship has Fires % number fire claims far exceeds % no cargo ships in Club


Is Age of Ship Relevant ?: Is Age of Ship Relevant ?


Age Band of Ships with Large Fire Claims: Age Band of Ships with Large Fire Claims % number of fire claims far exceed % Club entry For 15-19 yr age band


Size of Ships with Large Fire Claims: Size of Ships with Large Fire Claims


Size of Ships with Large Fire Claims: Size of Ships with Large Fire Claims % number of fire claims far exceeds % entry of 10,000gt - 30,000gt ships in Club


Slide29: 10 out of 68 fires occurred in port 52 of the ships were tramping 17 ships were on Voyage Charter 35 ships were on Time Charter


JurisdictionTop 7: Jurisdiction Top 7 9% 8 % 3% (3%) 3% % figures where fires occurred 3% 1%


Large Fire Caused Cargo Claims Trend: Large Fire Caused Cargo Claims Trend


Risk Profile: Risk Profile Dry Cargo ship 10,000gt - 30,000gt 15 – 19 years old Tramping Time Charter Spontaneous combustion/Discarded cigarettes Shore input


Slide33: What Can We Do ?


Slide34: Know your cargo Ensure a Good Cargo Watch is maintained Enforce No Smoking Practices