2021 Year and review
2021 Year and review
Dear Colleagues, Clients, Broker friends and other Business Associates
Well, as far as events go, during 2021 uncertainty continued to be the only certain element of the global picture and the “never happens to me” club carried on losing members.
Worldwide restrictions affected industrial activity, leading to labour disruptions and instability, whilst weather volatility severely impacted agriculture and generally caused serious material damages… all affecting the transport chain and, inevitably, causing ships’ delays !
Luckily, the freight market brought smiles to operators in general and bulker operators in particular!
This has had a direct impact on our activity because both the income and exposure of our Delay Cover is based on the fixed and agreed daily earnings, themselves a close reflection of the market.
So, during high freight market rates we will receive a higher premium income for the same number of ships… but of course more expensive claims, and this is particularly relevant for shoreside events, which are the more volatile and unpredictable side of our cover !
Whilst 2020 saw the number of claims rise because of the covid pandemic, in 2021 the pandemic did not take up as much of our time because of the exclusion that the reinsurance market imposed to all insurers. Of course, delay policies bound before the pandemic responded to covid related delays until expiry of the individual policy, hence also in 2021… and several did.
In 2021, however, the frequency of claims returned to usual levels, allowing the vast majority of clients to take full benefit of one’s own performance through our unique package, based on individual reward system.
"...as it marks the 10th anniversary of Nordic Marine’s creation and start of operations."
This is a major event for us, of which we are very proud of!
Who would have thought that 10 years after we got started in this adventure with Magnus, our Claims director, we would be covering over 1200 ships for close to 100 clients.
Reaching the 10th anniversary landmark was undoubtedly made possible by the privileged interaction we have with our network of brokers and the solid support of our reinsurers. They all recognised our knowhow and commitment, and supported it.
Many of the brokers we work with today have supported us since day one… and hopefully for a long time to come! They saw our commitment to excellence, both in terms of service to clients and underwriting results, and understood our choice for selective approach as the way to enact our strategy and create long-term mutually profitable relationships.
"Our thanks and gratefulness goes to all of you and to all our clients, old and new!"
Whilst we are very proud of what we have achieved, our approach is the same as in the past so the most rewarding success is… the next!
In the past 18 months we worked together with our partners, West, and focused in developing improved insurance solutions for our respective clients/members, for the common benefit.
This work will continue in 2022, when we will hopefully be able to meet brokers and clients of most markets again… in person, make joint presentations and have first hand feedback.
In a few days our in-house expertise will be further consolidated with one of the most recognised experts in the market, Jan Limnell, who formally join us in May (Details of our announcement can be found here).
Jan needs no introduction and, together with Constantinos and Yiannis of our Piraeus team, will be the tip of the spear for Nordic’s further enhancement and development, the “next gen”!
They will be backed up by the claims team headed by Magnus with Konstantinos as his “wingman” and all supported by an expanding accounting and back-office team in Stockholm.
In short, an excellent Team that will deliver second to none service from underwriting and claims handling, to accounting and back-office matters. All to make it easy for clients to spot the best market expertise and commitment to progress.
At the time of writing this note, the war between Ukraine and Russia sadly continues and with it the sad human consequences. In addition to those, of course, this war creates a volatility not only in the shipping environment, with new unpredictable risks for ship operators, but to the global economy.
Our view is that the increased freight rates from last year may go on, together with the volatility of the worldwide risk environment, and they will continue to motivate operators to hedge their exposures for the scenarios that mainstream covers expressly or de facto exclude.
As a “reaction” to the MV Ever Given incident many operators realised how quickly, and badly, events can affect one’s activity. In fact, a similar event took place recently in the Chesapeake Bay, US.
At the time, Nordic Marine was approached for comments by several news outlets, specialist and mainstream, and we followed this up with a series of articles published on our website / social media underlining how the potential exposures can easily be reduced, in a cost and work efficient way .
Since, what started as a few operators’ reaction to a high profile event has grown into a much wider and conscious “action”, and enquiries have been received at a consistently high level throughout 2021 and in the beginning of 2022.
There is still a huge margin of improvement, but the trend to “go 3D” as described in our article at the time may indeed have started, , because what 2020 and 2021 brought home is the fact that no matter how good a ship operator you are, the uncontrollable risks during a voyage keep evolving and confirm that in our environment uncertainty is the only certainty!
The rising uncertainty is driving the awareness of how important it is to control when losses stop, rather than focusing on the quantum of a theoretical recovery.
After all, what good is it to have cover for up to 180 or more days of lost income if losing the first 14 days, will have a long-term adverse effect on your operations?
To contextualise this, available claims’ data indicates that well above 80% of H&M related incidents will lead to a delay within the first 14 days within the 3 months following the incident, but the delay and consequently loss of income will rarely exceed 14 days. This sheds a light as to why there is such a deductible level, and sheds a light on our focus and selective technical assessment.
"A sort of “mainstreamisation” of niche!
Who else than Nordic could have done that?"
Events are such that it is still hard to guestimate where travel will take us, but at least it is (almost) sure that we will be able to sit around the same table with our colleagues and new shareholders from West of England, and hopefully visit some of the markets again.
Posedonia and Maritime Cyprus will take place and it will be fun to finally see people in flesh.
As usual we will announce our movements before each trip, so watch out or follow our LinkedIn to see what is going on.