Q: Do you think Global shipping will pick up in the next one or two years?

Ans : Unfortunately, the lows in shipping far outweigh the brief highs. There have been spasmodic pickups in freight rates for bulkers and tankers over the last few years but they soon fizzled out. The obvious driver of shipping is worldwide trade which appears to be under attack via a combination of possible trade wars (US and China) and an increase in nationalist and protectionist policies which could seriously impact on shipping volumes. I think that there is a greater chance that shipping will decline rather than pick up over the short to medium term and hope to be proved wrong. It will not be the first time.

Q: What is the effect of the global slump (or, at least very little growth overall) in the marine insurance sector?

Ans : Marine insurance and specifically hull and fixed premium P&I cover have been reducing their rates due to a combination of lower claims (which is good) and overcapacity in the market which leads to new underwriters believing they have the “answer” as to why premiums can get lower every year. Unfortunately, their answers are invariably incorrect and there have been substantial losses that have incurred. This had led to a reduction in capacity and/or consolidation of insurers. Whilst this has halted the decline in insurance rates, it has not led to any great increases either, so if you are a buyer of marine insurance, it is still a great value.

Q: Do you see any improvement in the ship owners' (and charterer's/ operators') community in discharging liabilities to agents and other service providers?

Ans : ITIC insures thousands of ship agents, ship brokers and ship managers around the world. The responsibilities passed from the owner or charterer to the service supplier has always been one-sided – i.e. the agent is responsible for as much as the operator can get away with!

ITIC is well used to this and it’s our job to try and level that playing field as we robustly protect the agent, broker or manager’s position if they are innocent, and settle as fast as possible if they are not!

Q: Arresting vessels or cargoes appear to be shunned as a method for recovery of outstanding dues by governments of almost all countries. Do you have any comment on the subject?

Ans : I suspect that governments don’t really understand shipping at all. In the UK, we seem to have a new shipping minister every six months so there is little point remembering their name as they will not be there long. The only time governments get interested in shipping is if there is a pollution incident and then they listen to all the wrong people and invariably make a complete mess when they do respond.

It is not just governments either. We see port authorities increasingly asking for guarantees from a local ship agent for dock damage rather than from the ship and their P&I insurer. ITIC often has to spend time educating those port authorities that the best way to guarantee their claim is from the P&I club of the shipowner and not from the local agent who earns a very modest fee for his services.

Q: We have experienced some cases where owners’ offices have been hacked and funds have been remitted to wrong addresses inserted by the hackers. There is a lot of delay in settling these claims because the owners are obviously reluctant to pay. Is there a speedy recourse to address such developments?

Ans : This is the subject that we talk about almost non-stop when we visit our members worldwide. There is ONE simple rule whenever you receive an email requesting a change of bank details, whether that is from a supplier, owner, charterer or even another J M BAXI GROUP office. It is that you teach your staff to automatically call (by phone) the company from whom you have received this request to check that it is authentic.

• Do not respond to their email as if it is a hacker, you are just corresponding with the thieves
• Do not trust the location of suggested new bank account - ever. There are plenty of crooks in UK, USA, and Hong Kong etc.
• Request for unusual intercompany transfers - check first by calling them
• New bank account of charterer/supplier - always check by calling them
• if you do email, use an email address you used previously - do not hit “reply to all”
• Bank accounts never close during an audit - that is a lie
• The reason why violent crime is down is because more people are getting mugged over the internet - don’t let it be you

In the last three months, we have seen claims from such incidents worth US$ 150,000, US$ 510,000 and Euro 250,000 respectively. All the staff that is involved in these mistakes had been told about the automatic call back, but they did not do so.

Q: We have been hearing a lot about BREXIT and its impending execution. What in your opinion would be the effect of this development on European and English Shipping?

Ans : Brexit is not my favourite subject as we have had it as a topic of conversation and news in the UK for almost 2.5 years. It is a subject that cannot be discussed at a social occasion as it is almost impossible for Brexiteers (those wishing to leave the European Union) and Remainers to agree on anything, even the time of day or the colour of their coffee. There are family and inter-generational divides (the young are usually remainers and the grandparents invariably for Brexit) as well. The politicians are as divided as the country.

As for its impact on shipping, well it will not help the British Flag as any EU-based owner will probably change to another flag state jurisdiction. It might be good news for ferry operators in the UK and even local ship agents as they can charge for customs clearance services on goods that for 40+ years were transported tariff-free. I see very little upside and more downside. Maybe I am being too gloomy as I am not an enthusiast for Brexit, to put it mildly.

Q: How many changes have you noticed in the shipping business in South East Asia - India - Middle East - Africa region during the last few years?

Ans : Singapore seems to be the premier shipping hub in South East Asia due to their tax incentives as nothing drives shipping like not paying any or maybe low taxes. My son is a dry cargo operator-based in Singapore and it’s clearly the place to be – close to India and the Asia Pacific with many of the decision makers based in the region. As an outsider, to me, India looks like sleeping giant of shipping which needs to be incentivised so that shipping entrepreneurs think not about setting up in Dubai or Singapore but in Mumbai or Chennai. After all, what bigger market is there locally other than India?

Q: How do you think the marine insurance is doing in India in general? Can you please share some thoughts for improving efficiency and reducing delays?

Ans : I cannot really comment on this as ITIC’s speciality is professional indemnity insurance which is very specialised and that has meant that ITIC has a dispensation from the Indian Government to underwrite ship agents in India directly.

Q: What regulatory changes in India do you look forward to?

Ans : Lesser the regulation the better but that is an optimistic request and few countries decrease their regulation on insurance even though it is one of the simplest products to deliver.

Q: Is ITIC planning to launch some new products in the near future? Please share.

Ans : ITIC’s primary offering is professional indemnity (or error and omissions) insurance to companies within the transport industry. This is our core and we stick to that as if you start offering cover for risks that you do not really understand that is where you can become unstuck.

We do offer additional ancillary covers such as debt collection cover, Directors’ and Officers’ cover, Maritime Labour Convention liability cover (to ship managers only), loss of commission insurance to shipbrokers in the event that a marine peril stops them earning their commission and also cash in transit (ship agents) and cash on board (ship managers) covers as well.

These additional covers came about from feedback from the membership as ITIC’s members (including the J M BAXI GROUP since 1985) are also its shareholders as we are a mutual and so are owned by the companies we cover.