Risk assessment of the Turkish Merchant Fleet in scope of hull and machinery insurance

The total worldwide insurance premium collected in marine industry in 2008 was approximately 22.23 billion USD Dollars. The 27.5% of this collected premium corresponding to 6.11 billion USD Dollars was collected from hull and machinery insurance. The hull and machinery premium paid by the owners of the Turkish merchant fleet is approximately 66 million USD Dollars corresponding to 1.1% of this total collected premium. This study aims to find out whether the above mentioned premiums paid by the Turkish owners collected by the insurance companies were based on a risk modeling in actual compliance with the risks faced by the Turkish Merchant fleet or not.First a focus group study was held in order to find out the perceptions of the owners for the hull and machinery insurers or their brokers from whom they receive insurance services. After that, a three stage survey was conducted through the medium and big sized ship owners in order to collect the necessary data. In the first part of the survey, the questions were about the risk management activities within the owner companies; in the second part of the survey, the questions were about the service quality of the hull and machinery insurance companies; and the third and the last part of the survey the questions aimed at determining and assessing the premiums paid (2005-2009) by the owners and the risks encountered.While collecting the required data from the authorized and responsible representatives of the owner companies, they were assured prior to the survey that everything discussed and revealed would definitely be apt to the strict principles of confidentiality.Having utilized the data collected through the above mentioned stages of the survey from the Turkish flagged ships of the owner companies corresponding to approximately 45% of the Turkish Merchant Fleet in DWT the overall age of which is around 22, a mathematical based risk model has been formed specifically concerning the Hull and Machinery Insurance applied to the Turkish Merchant Fleet.