In the marine area of the market, traders and teams can earn premiums from underwriting a vessel on its journey. The contracts taken out are sole journey accounts and expire at the end of the voyage.

With over four hundred vessels running trips all over the globe to hundreds of ports it is a busy market, and alongside the trips being constantly to different locations and of differing journey times the vessels themselves are of differing age and condition.

The values of the vessels will differ from a few hundred thousand for a small cargo ship to several hundred million for the latest state of the art supertanker. It is therefore standard practice for a trader or team to underwrite a part of a vessel and not assume the full 100% liability.

How does the process work then

In the underwriting section a trader will see firstly an option that leads to the live underwriting market where they can actively cover ships, or a link to their current market summary where they will see premiums earned versus claims.

By choosing to go to the “Cover Vessels” area, the complete list of those vessels ready for departure is scheduled by class of ship.

By scanning the accompanying information concerning the journey length and age of vessel and nature of trip a trader can decide whether to offer cover and to that extent the proportion they are happy to assume. Once covered, the premium is deposited in the trader’s account and the vessel appears in the summary table where it will remain until the journey is complete.

Incidents

If the ship encounters a problem the trader will be notified immediately they log in to the site the next time. Incidents can happen at any time either in the port or at sea. The FoXSE underwriting department will have established the potential problem/event and listed it along with the estimated cost.

If a trader finds themselves exposed to a large claim which is in excess of their current net worth, they have limited options. They can underwrite further ships in an attempt to earn enough premiums to cover the cost (hugely risky and of limited success), they can attempt to borrow from the bank in terms of a loan, or….they may have some rich mates. Either way a trader will have 24 hours to sort their affairs out before the FoXSE underwriting department starts liquidising the assets of the trader and they are declared bankrupt.