Marine Insurance Workshop

May 2015

VESSEL: “NORWEGIAN HULL”

H&M SUM INSURED: USD 32 000 000

Deductibles:

Cl. 12-18: USD 350 000

Cl. 12-15 and 12-16: N/A

Deductible as per Cl. 13-4: USD 50 000

General Average amount as per Cl. 4 - 8.3: USD 350 000

HI/FI SUM INSURED: USD 8 000 000

LOH SUM INSURED USD 1 800 000

BASIS: 14/90/90

Daily Indemnity: USD 20 000

CONDITIONS:

Nordic Marine Insurance Plan of 2013

• Introduction to the Owner

• Establish Owners Insurance Needs » H&M – LOH – HI/FI - WAR

• Establish Owners Philosophy

• Define Strategic Partners

• Suggest Insurance Strategy

How did we get there?

• The broker has a duty to act in the best interests of their

clients – an owners´ broker.

Acting on behalf of the person effecting the insurance

(The Plan Cl. 1-3)

• Reasons for using a broker

– Market Knowledge

– Market Access

– Documentation and Administration

The Role of the Insurance Broker

• History dates back to 1837

• Offices in Bergen, Oslo and Kristiansand

• Leading international insurer of Marine Hull

& Machinery, Loss of Hire and Total Loss

Interests

Background

• Quality Focus

• Long-term strategic partner

• Leading Underwriter & Claims Handler

• Added value through experience transfer

• Profit orientated

Business Philosophy

• Hull & Machinery

• Total Loss Interests

• Loss of Hire

• War

• Offshore Energy

• Charterers’ P&I

• Builders Risk

• Special Risk

• Yacht

• Marine Benefits

Products

Norwegian Hull Shipping Inc.

Vessel IMO No. Year GRT DWT Type

NORWEGIAN HULL 9071050 2004

33 000 47 000 GPC

BALTIC 8413400 2012 67 000 110 000 TTA

ADRIA 8413460 2002 28 800 62 000 BBU

BOSTON 9032490 2012 74 700 139 000 TTA

BRAVO 9112090 1999 150 000 274 000 TTA

ARAGON 8015713 2002 28 800 62 000 BBU

AKITA 9000703 2003 27 500 58 000 BBU

Norwegian Hull Shipping Inc.

Assessing Risk Assessing the risk

• The Vessels:

– Type

– Age

– Size

– Class

– Flag

– Trade / Cargo

– Detentions / Classification Issues

Vital input when assessing the risk

• The Operation:

– Ownership Structure

• Integrated organisation

• Third party management

– Reputation

– Insurance History

– Financial Standing

Vital input when assessing the risk

• The Vessels

• The Operation

• Insurance Coverage:

– Scope of Cover

– Sums Insured

– Deductible

Vital input when assessing the risk

• Hull & Machinery (NMIP Chapter 10)

– Insurance on full conditions covers:

• Total loss

• Particular Average

• Salvage

• Collision Liability

• General Average

Hull Related Insurances

• Hull & Machinery (H&M)

• Separate (additional) insurances against

total loss (NMIP Chapter14)

– Hull Interest insurance

– Freight Interest insurance

Hull Related Insurances

• Hull & Machinery (H&M)

• Insurances against total loss

• Loss of Hire (NMIP Chapter 16) – Covers financial loss when the vessel is wholly or

partially deprived of income as a consequence of

damage to the vessel, subject to the damage being

recoverable under her Hull & Machinery policy.

Hull Related Insurances

• Hull & Machinery (H&M)

• Insurances against total loss

• Loss of Hire

• War Risk insurance (NMIP Chapter 15) – Covering physical damage to the vessel as a

consequence of war perils (NMIP Cl. 2-9).

Hull Related Insurances

• The Vessels

• The Operation

• Insurance Coverage:

– Scope of Cover

– Sums Insured

– Deductible

Vital input when assessing the risk

Norwegian Hull Club Underwriting Process

• Risk assessment: Screening at two levels;

1. Public information (25-plus indicators)

2. Extended list of indicators (Owner data)

• Pricing

1. NHC database

2. Cefor database

• Line guide

Norwegian Hull Shipping Inc.

Score

Age

Vessel

Watch

Comparable

Vessels

CTL

Issues?

Novel

Design?

Homogeneous

Fleet

Size

Class

Society

# Classes

Change of Class

Class Records

Flag

State

Aw ards

Change of

Ow nership

Change of

Management

Premium

Payment

Claim Rating

Banned

Detention

CountDetentions

Days

Seaw ay

Profit

Freq

Rightship

Weighted Average

0

1

2

3

4

5

Score

NORWEGIAN SHIPPING & TRADING ASA

Risk Assessment Scoring

Vessel Year Type IMO No. GRT DWT

Sum

Insured Deductible Rate % Premium

NORWEGIAN HULL 2004 GPC 9071050 33 000 47 000 32 000 000 350 000 0,4725 151 200

BALTIC 2012 TTA 8413400 58 200 110 000 60 000 000 150 000 0,1945 116 700

ADRIA 2002 BBU 8413460 28 800 62 000 28 000 000 75 000 0,4541 127 148

BOSTON 2012 TTA 9032490 74 700 139 000 42 000 000 150 000 0,3027 127 134

BRAVO 1999 TTA 9112090 167 000 274 000 48 000 000 250 000 0,3460 166 080

ARAGON 2002 BBU 8015713 28 800 62 000 28 000 000 75 000 0,4541 127 148

AKITA 2003 BBU 9000703 27 500 58 000 32 000 000 75 000 0,4000 128 000

943 410

Hull & Machinery Quote Hull & Machinery Quote

Subject to the terms and conditions of the Nordic Marine Insurance Plan of 2013,

Part One and Chapters 10 -13, but deductibles as follows in lieu of 12-18 of the

Plan:

”Norwegian Hull” : $350,000

”Akita” / ”Aragon” / ”Adria”: $75,000

”Baltic” / ”Boston”: $150,000

”Bravo”: $250,000

Deductible as per Cl. 13-4 of the Plan: $50,000

General Average amount as per CL. 4-8.3 of the Plan: $ 350,000

CEFOR Sanction Limitation & Exclusion Clause

Claims Leader: Norwegian Hull Club

Quarterly premium payment

Brokerage: 10%

H&M Conditions

Hull / Freight Interest Quote

Vessel Year Type IMO No. GRT DWT Sum Insured Rate % Premium

NORWEGIAN HULL 2004 GPC 9071050 33 000 47 000 8 000 000 0,15 12 000

BALTIC 2012 TTA 8413400 58 200 110 000 15 000 000 0,1 15 000

ADRIA 2002 BBU 8413460 28 800 62 000 7 000 000 0,15 10 500

BOSTON 2012 TTA 9032490 74 700 139 000 10 500 000 0,125 13 125

BRAVO 1999 TTA 9112090 167 000 274 000 12 000 000 0,125 15 000

ARAGON 2002 BBU 8015713 28 800 62 000 7 000 000 0,15 10 500

AKITA 2003 BBU 9000703 27 500 58 000 8 000 000 0,15 12 000

76 125

Hull / Freight Interest - Conditions

Subject to the terms and conditions of the Nordic Marine

Insurance Plan of 2013, Part One and Chapter 14.

Upfront premium payment

Brokerage: 10%

Loss of Hire Quote

Vessel Year Type IMO No. GRT DWT D / I Basis Sum Insured Rate % Premium

NORWEGIAN HULL 2004 GPC 9071050 33 000 47 000 20 000 14/90/90 1 800 000 2,5 45 000

BALTIC 2012 TTA 8413400 58 200 110 000 50 000 14/90/90 4 500 000 2,0 90 000

ADRIA 2002 BBU 8413460 28 800 62 000 10 000 14/90/90 900 000 2,5 22 500

BOSTON 2012 TTA 9032490 74 700 139 000 45 000 14/90/90 4 050 000 2,5 101 250

BRAVO 1999 TTA 9112090 167 000 274 000 55 000 14/90/90 4 950 000 2,5 123 750

ARAGON 2002 BBU 8015713 28 800 62 000 10 000 14/90/90 900 000 2,5 22 500

AKITA 2003 BBU 9000703 27 500 58 000 10 000 14/90/90 900 000 2,5 22 500

382 500

Loss of Hire - Conditions

• Subject to the terms and conditions of the

Nordic Marine Insurance Plan of 2013,

Part One and Chapter 16

• Upfront premium payment

• Brokerage: 10,0%

Vessel Year Type IMO No. GRT DWT

Sum

Insured Rate % Premium

NORWEGIAN HULL 2004 GPC 9071050 33 000 47 000 49 800 000 0,01 4 980

BALTIC 2012 TTA 8413400 58 200 110 000 94 500 000 0,01 9 450

ADRIA 2002 BBU 8413460 28 800 62 000 42 900 000 0,01 4 290

BOSTON 2012 TTA 9032490 74 700 139 000 67 050 000 0,01 6 705

BRAVO 1999 TTA 9112090 167 000 274 000 78 950 000 0,01 7 895

ARAGON 2002 BBU 8015713 28 800 62 000 42 900 000 0,01 4 290

AKITA 2003 BBU 9000703 27 500 58 000 48 900 000 0,01 4 890

42 500

WAR Quote

WAR - Conditions Subject to the Nordic Marine Insurance Plan of 2013, Part One and chapter 15 against war risks

as defined in Cl. 2-9.

Covers (Cl. 15-2, Interests insured)

- total loss and damage

- collision liability

- hull interest/freight interest

- loss of hire

- P&I and occupational injury insurance

Paramount clauses:

- Institute Cyber Attack Exclusion Clause 10/11/03 (Cl. 380)

- CEFOR Sanction Limitation & Exclusion Clause

World wide trading, except areas that are conditional or excluded as per the list of Areas of

Perceived Enhanced Risk published by the Joint War Committee in London.

The list may be changed on immediate notice.

Claims Leader: Norwegian Hull Club

Upfront premium payment

Brokerage: 10%

Conclude the placing

Negotiating terms

Evaluation of terms

Recommendation to the shipowner

Placing the order…

MARINE COVER-NOTE NO.: 10001 / 2013.

TO: Norwegian Hull Shipping Inc.

In accordance with your instructions we have effected

insurance as follows:

INSURED: Norwegian Hull Shipping Inc.

VESSELS:

GPC ”NORWEGIAN HULL” IMO No 9071050

BBU ”AKITA” IMO No 9000703

BBU ”ARAGON” IMO No 8015713

BBU ”ADRIA” IMO No 8413460

TTA ”BOSTON” IMO No 9032490

TTA ”BALTIC” IMO No 8413400

TTA ”BRAVO” IMO No 9112090

PERIOD: 01.01.2015 – 31.12.2015 (Norwegian time)

INTEREST: Hull and Machinery values as below

SUM INSURED: 100 % ORDER HEREON: 15 %

VESSELS: Value: Rate: Premium (100%):

(USD) (%) (USD)

GPC ”NORWEGIAN HULL” 32,000,000 0.4725 151,200

BBU ”AKITA” 32,000,000 0.4000 128,000

BBU ”ARAGON” 28,000,000 0.4541 127,148

BBU ”ADRIA” 28,000,000 0.4541 127.148

TTA ”BALTIC” 60,000,000 0.1945 116,700

TTA ”BOSTON” 42,000,000 0.3027 127,134

TTA ”BRAVO” 48,000,000 0.3460 166,080

CONDITIONS: Subject to the terms and conditions of the Nordic

Marine Insurance Plan of 2013, Part One and Chapter 10 – 13

but deductibles as follows in lieu of Cl. 12-18 of the Plan:

“NORWEGIAN HULL”: USD 350,000

“AKITA”,”ARAGON”,

“ADRIA”: USD 75,000 ev

“ BALTIC” “ BOSTON”: USD 150,000 ev

“BRAVO”: USD 250,000

Deductible as per Cl. 13-4 of the Plan: USD 50.000 ev

General Average amount as per Cl. 4 - 8.3. of the Plan: USD 350.000

TRADING:

Worldwide subject to Nordic Trading Warranties, but vessels with Ice Class

1A may call at ports in the Gulf of Finland year around without Additional

Premium – provided sailing conditions approved by the respective

Countries’ Ice / Port Authorities and all recommendations complied with.

MORTGAGEES:

It is hereby noted and agreed that the interest of Trustworthy BANK, as

first priority mortgagees to be noted hereunder in accordance with the

Nordic Marine Insurance Plan of 2013, Chapter 7.

CLAIMS LEADER: Underwriters hereon to follow Norwegian Hull Club, on claims handling and adjustments in all respects (excl. ex gratia settlements) in accordance with Chapter 9 of the Nordic Marine Insurance Plan of 2013. GROSS PREMIUM: USD 943,410 p.a. payable quarterly SECURITY: 15.00% Norwegian Hull Club 10.00% HDI Gerling 35.00% Underwriters at Lloyds, London 15.00% Allianz 15.00% Assicurazioni Generali 10.00% People’s Insurance Company of China 100.00%

DATE: 1st June, 2015 for Nordic Brokers AS

as Brokers only

EXPECT MORE