MARINE HULL INSURANCE: Underwriters’ integrity is essential in assessing ships’ seaworthiness

JAKARTA (ANTARA News) -- Underwriters are required to have integrity in assessing the seaworthiness of ships to minimize the risk of large insurance claims in the event of damage or even accidents once the ship has sailed.
 
This statement was conveyed by Director of Operations Engineering of Indonesia Re, Kocu A. Hutagalung, in a discussion entitled ‘Bad Weather Guarantee In terms of Naval Architecture and Shipbuilding Engineering, Competence & Monitoring, Insurance Regulation and Policy (ITC Hull) in Jakarta, Wednesday (10/04).
 
"Underwriters must have the courage to refuse to accept the risk if there is a finding that the ship is not seaworthy, because if an accident occurs, so many will be harmed," said Kocu.
 
Kocu's statement was motivated by the polemic that is still happening in the case of a ship's seaworthiness assessment before sailing. It is not uncommon for a Sailing Permit (SIB) or Sailing Approval (SPB) to be issued even though the condition of the ship is not suitable for sailing. To issue SPB / SIB requires an agreement between the harbormaster, ship owner and skipper.
 
Considering that every sailing ship, along with its crew and passengers are insured, the role of the underwriter is very vital to assess the ship's unworthiness. Even so, the ship owner as the insured party has the right to choose or change the insurance vendor if he does not meet an agreement between the two parties regarding the maritime affairs of the ship.
 
"Now the decision is in our hands (insurance) to accept it or not. If we are like them, in the future it will continue to be like this. We must have integrity in taking risks," he said.
 
During 2018 alone, Indonesia Re recorded a loss ratio of Marine Hull reaching 120 percent with a value of more than IDR 200 billion. The majority of claims are caused by constructive total loss or the cost of repair is greater than the value of the goods.
 
In line with Kocu, Technical Director of Services Insurance, Tania Arifia Indah Liany regretted the lax supervision of related parties until the SIB / SPB could be issued even though the ship was not suitable for going to sea. "Of course, our underwriter team is very selective (chooses risk) because we think that SIB / SPB does not represent the ship's worthiness (to sail)," he said.
 
Meanwhile on the same occasion, Guntur Tampubolon, Managing Director of Radita Hutama Internusa (Charles Taylor Adjusting) did not deny that the issuance of SIB / SPB on ships that turned out to be not / less seaworthy also often came from business or cargo owners, who wanted their goods to reach the destination on time without seeing the condition of the ship or weather forecast reports. 
 
 
"So it is sacrificing long-term interests for short-term interests, and ultimately the business owner and insurance are losing money," he concluded.