Limitations of change management models

Limitations of change management models Using the case as a basis for analysis, discuss the potential limitations of current change management models and processes in organisations with which you are. This assignment is based on the case study organisations change. Change is an organizational reality. External forces for change include the marketplace, government laws and regulations, technology, labour markets, and economic changes. Internal forces of change include organizational strategy, equipment, the workforce, and employee attitudes. Change is generally a response to some significant threat or opportunity arising outside of the organisation. According to Pettigrew (1999) Changes within an organisation take place both in response to business and economic events and to processes of managerial perception, choice and actions. Managers in this sense see events taking place that, to them, signal the need for change. The change faced by Power Co at the start of the project was because of the fact that it did not had any related experience in the design and implementation of similar projects (which involves a processing technology). This state could have cause difficulties of changing from the status quo as transformational and disorientation etc. This change was caused by the unfamiliarity and alienation of the new technology to the investment delivery team and operations. As the case studies civil engineers; electrical engineers appear not to have enjoyed quite the same status had to have substantial amount of information to take the investment decision which was of strategic importance. Power Co tackled the above problem by recognizing the fact that the disorientation from the current technology can be eliminated by exploiting the knowledge base residing in the supply base Power Co developed a number of characteristics which eventually become its weakness. This was to have two tiers affect; firstly, it finds the solution of lack of prior knowledge of the change, secondly, it helps in making technologies were increasingly cost-competitive. According to Kellow (1996) described as a dam building organisation guilty of reverse adaptation, Power Co in a precarious in some work areas through loss of expertise and corporate knowledge the identification and the administration of knowledge within the Power Co business environment can be appropriately planned only if the characteristics and the needs of each particular firm are taken into consideration. In this context, the prior exploration of the business and the market environment is necessary in order to develop appropr iate plans of action regarding the retrieval, the process and the distribution of knowledge within any modern organization. At a first level, it is necessary to identify the type of knowledge required for a specific firm. Towards this direction, it was noticed by Anand (2003, p15) that the knowledge possessed by an organization and its members can be classified as explicit or tacit; explicit knowledge can be codified and communicated without much difficulty while tacit knowledge such as the manner of operating sensitive equipment or interpersonal skills-is not so easily articulated, as the case study power Co among the managerial class many were told that there was no position for them and they therefore elected to take a voluntary redundancy. Bunker (2005, p12) the reasons for the development of the above phenomenon have not been identified yet. It seems that firms managers do not have the necessary learning in order to. Moreover, the study of Bunker (2005, p12) showed that much of that failure stems from not understanding how to manage the structural side of change and the human dynamic of transition. On the other hand, Katzenbach (1996, p149) noticed that change efforts are often conceived as waves of initiatives that sweep through an organization from the top down, or the bottom up, or both, and flow across functions. In other words, change initiatives as most of the organizational plans are not accepted by employees at least for a specific period. The specific issue was also highlighted by Huy (2002, p31) who supported that fundamental change in personnel, strategy, organizational identity, or established work roles and interests often triggers intense emotions. For this reason, it is necessary that firms managers m ake the necessary preparations before attempt any change within the organizational environment (preparation in this case could include the organizational audit, the identification of the position and the advantages of the competitors and the choice of the most cost-effective plans identification of plans that are appropriate for the achievement of the various organizational targets but within a budget that will be set in advance by the firms managers. These problems stem from employee perceptions about how they are treated at work and the match between individual and organization needs and desires. Dissatisfaction is a symptom of an underlying employee problem that should be addressed. Unusual or high levels of absenteeism and turnover also represent forces for change. Power Co Management problem for those who genuinely embraced change and those who merely sought promotion and also there was a strategy of consultation and participation, individual examples emerged of staff feeling that, due to the end of building dams, a reduction in the workforce. Organizations might respond to these problems by using the various approaches to job design, by implementing realistic job previews, by reducing employees role conflict, overload, and ambiguity, and by removing the different stressors. Prospects for positive change stem from employee participation and suggestions. The results revealed through most of the relevant studies reveal that change is not welcomed by employees in most organizations internationally as the case study there is strong feeling by Power Co that the changes of commercialisation were forced on the organisation and that staff had few alternatives other than to accept their fate, whenever the attempted changes have the consent of the employees i.e. when they progress through the employees active participation, then their implementation is very likely to be successful. The specific issue was examined by Eoyang (2001,p5) who supported that many organization change initiatives start at the top and deal strongly with any resistance from system agents that blocks progress; common ways of responding to resistance include downsizing, restructuring, and re-engineering. Other methods for dealing with resistance developed within modern organizations regarding specific plans of change are also available to modern organizations. The choice of the method employed at each particular case belongs to the firms managers who will also identify the risks and the advantages related with the implementation of each relevant change. At was on the change to come, which omitted the historical context. The program was sophisticated, involving as it did newsletters, visits by the CEO, briefings for subordinate leaders and even a telephone hotline. Moreover, The change faced by Power Co at the start of the shifted from civil engineering projects of building dams and power stations, to that of a business entity charged with the responsibility of providing to the government, as nominal owner, a return on investment was because of the fact that it did not had any related experience in the design and in the implementation of similar projects (which involves a competition from other electricity suppliers). This state could have cause difficulties of changing from the status quo as barrier and disorientation etc. This change was caused by the unfamiliarity and alienation of the new technology to the investment delivery team and the operations. Power Co had to have substantial amount of the information to take the investment decision which was of strategic importance in terms of its volume. Even if the policies applied on various organizational activities are appropriate regarding the targets set by the firms managers, in practice man y of these policies have to be rejected as inappropriate if being evaluated regarding the resources required for their realization. It is for this reason that Greve (1998, p59) noticed that change initiatives could be characterized as an outcome jointly determined by motivation to change, opportunity to change, and capability to change. For this reason, before the implementation of any plan of change within a particular organization it is necessary that the entire organizational context is carefully reviewed taking into account the fact that the conditions in the market (as well as within the organization) can change at any time creating new terms regarding the success of any attempted change. The sector of organizational activities influenced by the specific plans cannot be precisely identified; it is very likely that different organizational sectors are targeted by each specific plan of change; the needs of the organization and the trends of the market are the main criteria for th e relevant choice (plan of change applied on a specific organization). Towards this direction, it is noticed by Poole (1998, p45) that when change is needed in an organization it is likely the learning or identity of the organization will be targeted for change; the transformed organization, whether it be minor (first-order change) or major (second-order change), will not be the same as its predecessor. In other words, one of the most important consequences of plans of organizational change is that their effects on the various aspects of the organizational activities are likely to be permanent and extensive. By the attempted change, a new organizational environment is created; new organizational plans are then very likely to be implemented in accordance with the firms culture and characteristics and the market trends. It should be noticed that the implementation of plans of change within modern organizations is a challenging task usually requiring an extensive net of reforms within the organizational body. Modern literature on organizational learning and change offers to the firms managers a series of theoretical models that can effectively support the relevant organizational initiatives. We could refer primarily to the models suggested by Fennell (1993, p90): a) The strategic choice model (which is the one based in the changes happened to particular variables like the board composition and structure), b) The population dynamics (which is influenced by the population level changes) and c) The change in technical and institutional environments (which are mainly refer to the regulatory change related with the operation of modern organizations). Another model is the Collison and Parcell have developed their own model of organizational learning through which the knowledge management method that can be used for change, Capturing, sharing and exploiting knowledge, experience and good practices. Also Lewins (1958) change model, a systems model of change, and organization development. Exhibited, positive reinforcement is used to reinforce the desired. Additional coaching and modelling also are used at this point to reinforce the stability of the change. Lewin`s model will be used in this paper in order to examine the organizational change. The identification of the potential weaknesses of the firms organizational change- using this model will help towards the development of an appropriate plan of change if considered as necessary regarding the various activities of the specific firm The change at this level could have been a lack of flow of information to the organizational high level officials. Another issue was the absence of other electricity suppliers. The absence of competition produced a surreal climate of merely preparing for a possibility rather than a reality in the organization. Still another was the identification of the integration issues between the other parts of the organization and the management e.g. changes in the company wide operating procedures, as the case study that restructuring was seen as necessary by both senior management various consultants the pre-existing structure were never Cleary identified or ar ticulated. The higher level management did not considered the project to be of strategic importance in the sense that it does not intend to operate similar projects in the future. So they decided only to be concerned with business level issues and operational problems were left to the ad-hoc local solution (e.g. the external environment dos not remain stationary during the period of implementing change and the internal re-configuration may impact upon the style and context of change being pursued by the organization itself ). Unfreezing The focus of this stage is to create the motivation to change. In so doing, individuals are encouraged to replace old behaviours and attitudes with those desired by management. Managers can begin the unfreezing process by disconfirming the usefulness or appropriateness of employees present behaviours or attitudes. Due to the nature of industry, in which Power Co is operating, the initial teething problems are very significant and change tends to have substantial inefficiencies in the start. The reason being obviously the complexity of the system this change can cause project failure economically if not managed properly and change is not improved as early as possible. Power Co made a less than successful attempt at this when senior management realised that there were some dysfunctional consequences of the commercialisation structure of 1992. The Solution adopted solution to this problem was the establishment of change teams were the focal point of commercialisation but enthusiasm faded as their work fell into disarray in some areas which was to facilitate a joint effort at change through identification of operational problems and developing solutions to them. Changing Because change involves learning, this stage entails providing employees with new information, new behavioural models, or new ways of looking at things. The purpose is to help employees learn new concepts or points of view. Role models, mentors, experts, benchmarking the company against worldà ¢Ã¢â€š ¬Ã¢â‚¬Ëœclass organizations, and training are useful mechanisms to facilitate change. Appointing a person called Project sponsor having knowledge about the operations to oversee the project from the feasibility to the implementation. They were treated operationally as separate mutterers. After dam construction ceased, the workfares was decimated, many were forced redundancies due to the winding-down of dam construction, but others left as a matter of choice. This makes the project more stable operationally in the long run as the operational aspects of the system are conveyed to the delivery team during change stage. Failure to perform organizational impact analysis the organizational impact analysis studies the way a proposed transformational change the organization will be dominated by its civil engineering and the electrical engineers appear not to have enjoyed quite the same statues. This was due to the fact that the engineering problems were civil rather than electrical would affect organization structure, attitudes, decision making and operations. The analysis ai ms to ensure the change best to ensure integration with the organization. Refreezing Change is stabilized during refreezing by helping employees integrate the changed behaviour or attitude into their normal way of doing things. This is accomplished by first giving employees the chance to exhibit the new behaviours or attitudes. This would have triggered the collaboration process. A flexible management approach was adopted to improve collaboration by giving the staff shifts, autonomy in their work practices. Afterwards staff rotation was made which motivated the employees to share their experiences. The resultant best practices were accumulated and formally documented after reasonable time by the operations managers Power Co moved through a damaging period of controversy over the natural environment and excessive reiteration of past problems could have had a negative impact on moral. Issues to relate to refreezing failed to arise because of the continuing state of flux after commercialisation and the rapid replacement of staff who left. The above directly fulfilled project objectives of being manageable in the long run (as issues being managed efficiently) and flexibility by providing the different views through joint learning. It also indirectly helped in achieving the project objective of being economic by reducing project risk. The above directly could have fulfilled project objectives of being safe and secure (by providing the staff the required help needed for the operations). It also indirectly helped in achieving the project objective of being economic (by increasing the staff efficiency). Conclusions The presentation of all the above issues proves that the knowledge management systems implemented by the particular organization have been carefully chosen in order to ensure the achievement of the organizational aims. The divorce of the business commitment to embracing the all issues of the project acted as a change for complete integration of technology into the organization. Commitment to the change must be universal including all involved. Senior management must demonstrate commitment in the allocation of resources required (people, money, time etc) to achieve change. The argument given was that the management did not intend to operate similar projects organizational impact analysis studies the way a proposed transformational change the organization will be dominated by its civil engineering and the electrical engineers appear not to have enjoyed quite the same statues other than this one in the future might not have sufficed as it could have render the change ineffective in term s of achieving its objectives of being economic and manageable over the planning. By doing so some issues might have come to the management attention so late that the project failure could have occurred This lack of commitment might have been caused by the inherent characteristics of the capital goods industry which view the knowledge management as hamstrung due to structural fragmentation inherent in the organization, the one-off nature of the projects, the presences of the culturally disparate professions and the low level of trust.

Fool Chapter 3

THREE OUR DARKER PURPOSE[15] â€Å"Well this is a downy lot of goose toss if I've ever read it,† said I. I sat on the bastard's back, cross-legged, reading the letter he'd written to his father. â€Å"‘And my lord must understand how unjust it is that I, the issue of true passion, is shorn of respect and position while deference is given my half brother, who is the product of a bed made of duty and drudgery.'† â€Å"It's true,† said the bastard. â€Å"Am I not as true of shape, as sharp of mind, a – â€Å" â€Å"You're a whiny little wanker,[16] is what you are,† said I, my brashness perhaps spurred by the weight of Drool, who was sitting on the bastard's legs. â€Å"What did you think you would possibly gain by giving this letter to your father?† â€Å"That he might relent and give me half my brother's title and inheritance.† â€Å"Because your mother was a better boff than Edgar's? You're a bastard and an idiot.† â€Å"You could not know, little man.† It was tempting then, to clout the knave across the head with Jones, or better, slit his throat with his own sword, but as much as the king might favor me, he favors the order of his power more. The murder of Gloucester's son, no matter how deserved, would not go unpunished. But I was fast on my way to fool's funeral anyway if I let the bastard up before his anger cooled. I'd sent Shanker Mary away in hope that any wrath that fell might pass her by. I needed a threat to stay Edmund's hand, but I had none. I am the least powerful of all about the court. My only influence is raising others' ire. â€Å"I do know what it is to be deprived by the accident of birth, Edmund.† â€Å"We are not the same. You are as common as field dirt. I am not.† â€Å"I could not know then, Edmund, what it is to have my title cast as an insult? If I call you bastard, and you call me fool, can we answer as men?† â€Å"No riddles, fool. I can't feel my feet.† â€Å"Why would you want to feel your feet? Is that more of the debauchery of the ruling class I hear so much about? So blessed are you with access to the flesh's pleasures that you have to devise ingenious perversions to get your withered, inbred plumbing to come to attention – need to feel your feet and whip the stable boy with a dead rabbit to scratch your scurvy, libidinous itch, is it?† â€Å"What are you on about, fool? I can't feel my feet because there's a great oaf sitting on my legs.† â€Å"Oh. Quite right, sorry. Drool, lift off a bit, but don't let him up.† I climbed from the bastard's back and walked to the laundry doorway where he could see me. â€Å"What you want is property and title. Do you imagine that you will get it by begging?† â€Å"The letter's not begging.† â€Å"You want your brother's fortune. How much better would a letter from him convince your father of your worth?† â€Å"He would never write such a letter, and besides, he does not play for favor, it is his already.† â€Å"Then perhaps the problem is moving favor from Edgar to you. The right letter from him would do it. A letter wherein he confesses his impatience with waiting for his inheritance, and asks for your help in usurping your father.† â€Å"You're mad, fool. Edgar would never write such a letter.† â€Å"I didn't say he would. Do you have anything written in his hand?† â€Å"I do, a letter of credit he was to grant to a wool merchant in Barking Upminster.† â€Å"Do you, sweet bastard, know what a scriptorium is?† â€Å"Aye, it's a place in the monastery where they copy documents – bibles and such.† â€Å"And so my accident of birth is the remedy of yours, for because I hadn't even one parent to lay claim to me, I was brought up in a nunnery that had just such a scriptorium, where, yes, they taught a boy to copy documents, but for our darker purpose, they taught him to copy it in exactly the hand that he found on the page, and the one before that, and the one before that. Letter to letter, stroke for stroke, the same hand as a man long gone to the grave.† â€Å"So you are a skilled forger? If you were raised in a nunnery how is it you are a fool and not a monk or a priest?† â€Å"How is it that you, the son of an earl, must plead mercy from under the arse of an enormous nitwit? We're all Fate's bastards. Shall we compose a letter, Edmund?† I'm sure I would have become a monk, but for the anchoress. The closest to court I would have come would have been praying for the forgiveness of some noble's war crimes. Was I not reared for the monastic life from the moment Mother Basil found me squirming on the steps of the abbey at Dog Snogging[17] on the Ouze? I never knew my parents, but Mother Basil told me once that she thought my mother might have been a madwoman from the local village who had drowned in the river Ouze shortly after I appeared on the doorstep. If that were so, the abbess told me, then my mother had been touched by God (like the Natural) and so I was given to the abbey as God's special child. The nuns, most of whom were of noble birth, second and third daughters who could not find a noble husband, doted on me like a new puppy. So tiny was I that the abbess would carry me with her in her apron pocket, and thus I was given the name of Pocket. Little Pocket of Dog Snogging Abbey. I was much the novelty, the only male in that all-female world, and the nuns competed to see who might carry me in their apron pocket, although I do not remember it. Later, after I learned to walk, they would stand me on the table at mealtime and have me parade up and down waving my winky at them, a unique appendage in those feminine environs. I was seven before I realized that you could eat breakfast with your pants on. Still, I always felt separate from the rest of them, a different creature, isolated. I was allowed to sleep on the floor in the abbess's chambers, as she had a woven rug given her by the bishop. On cold nights I was permitted to sleep under her covers to keep her feet warm, unless one of the other nuns had joined her for that purpose. Mother Basil and I were constant companions, even after I grew out of her marsupial affection. I attended the masses and prayers with her every day from as long as I could remember. How I loved watching her shave every morning after sunup, stropping her razor on a leather strap and carefully scraping the blue-black whiskers from her face. She would show me how to shave the little spot under your nose, and how she pulled aside the skin on her neck, so as not to nick her Adam's apple. But she was a stern mistress, and I had to pray every three hours like all the other nuns, as well as carry water for her bath, chop wood, scrub floors, work in the garden, as well as take lessons in maths, catechism, Latin and Greek, and calligraphy. By the time I was nine I could read and write three languages and recite The Lives of the Saints from memory. I lived to serve God and the nuns of Dog Snogging, hoping that one day I might be ordained as a priest myself. And I might have, but then one day workmen came to the abbey, stonecutters and masons, and in a matter of days they had built a cell off of one of the abandoned passages in the rectory. We were going to have our very own anchorite, or in our case, anchoress. An acolyte so devoted to God that she would be walled up in a cell with only a small opening through which she would be passed food and water, and there she would spend the rest of her life, literally part of the church, praying and dispensing wisdom to the people of the village through her window until she was taken into the bosom of the Lord. Next to being martyred, it was the most holy act of devotion a person could perform. Daily I crept out of Mother Basil's quarters to check on the progress of the cell, hoping to somehow bask in the glory that would be bestowed upon the anchoress. But as the walls rose, I saw there was no window left to the outside, no place for the villagers to receive blessings, as was the custom. â€Å"Our anchoress will be very special,† Mother Basil explained in her steady baritone voice. â€Å"So devout is she that she will only lay eyes on those who bring her food. She will not be distracted from her prayers for the king's salvation.† â€Å"She is the charge of the king?† â€Å"No other,† said Mother Basil. The rest of us were bound by payment to pray for the forgiveness of the Earl of Sussex, who had slaughtered thousands of innocents in the last war with the Belgians and was bound to toast on the coals of Hell unless we could fulfill his penance, which had been pronounced by the Pope himself to be seven million Hail Marys per peasant. (Even with a dispensation and a half-price coupon purchased at Lourdes, the earl was getting no more than a thousand Hail Marys to the penny, so Dog Snogging was becoming a very rich monastery on his sins.) But our anchoress would answer for the sins of the king himself. He was said to have perpetrated some jolly-good wickedness, so her prayers must be very potent indeed. â€Å"Please, Mother, please let me take food to the anchoress.† â€Å"No one is to see or speak to her.† â€Å"But someone has to take her food. Let me do it. I promise not to look.† â€Å"I shall consult the Lord.† I never saw the anchoress arrive. The rumor simply passed that she was in the abbey and the workmen had set the stones around her. Week's went by with me begging the abbess to allow me the holy duty of feeding the anchoress, but it was not until one evening when Mother Basil needed to spend the night alone with young sister Mandy, praying in private for the forgiveness of what the abbess called a â€Å"Smashing Horny Weekender,† that I was allowed to attend to the anchoress. â€Å"In fact,† said the Reverend Mother, â€Å"you stay there, outside her cell until morning, and see if you can learn some piety. Don't come back until morning. Late morning. And bring tea and a couple of scones with you when you come back. And some jam.† I thought I would burst, I was so excited when I first made my way down that long, dark hallway – carrying a plate of cheese and bread, and a flagon of ale. I half expected to see the glory of God shining through the window, but when I got there, it wasn't a window at all, but an arrow loop, like in a castle wall, cut in the shape of a cross, the edges tapered so that the broad stone came to a point at the opening. It was as if the masons only knew one window they could put in a thick wall. (Funny that arrow loops and sword hilts, mechanisms of death, form the sign of the cross – a symbol of mercy – but on second thought, I guess it was a mechanism of death in itself.) The opening was barely wide enough to pass the flagon through; the plate would just fit through at the cross. I waited. No light came from inside the cell. A single candle on the wall across from the opening was the only illumination. I was terrified. I listened, to see if I could hear the anchoress reciting novenas. There wasn't even the sound of breathing. Was she sleeping? What kind of sin was it to interrupt the prayers of someone so holy? I put the plate and ale on the floor and tried to peer into the darkness of the cell, perhaps see her glow. Then I saw it. The dim sparkle of the candle reflecting in an eye. She was sitting there, not two feet from the opening. I jumped back against the far wall, knocking over the ale on the way. â€Å"Did I frighten you?† came a woman's voice. â€Å"No. No, I was just, I am – forgive me. I am awed by your piety.† Then she laughed. It was sad laughter, as if it had been held a long time and then let out in almost a sob, but she was laughing and I was confused. â€Å"I'm sorry, mistress – â€Å" â€Å"No, no, no, don't be sorry. Don't you dare be sorry, boy.† â€Å"I'm not. I won't be.† â€Å"What is your name?† â€Å"Pocket, mum.† â€Å"Pocket,† she repeated, and she laughed some more. â€Å"You've spilled my ale, Pocket.† â€Å"Aye, mum. Shall I fetch you some more?† â€Å"If you don't want the glory of my bloody godliness burning us both down, you better had, hadn't you, friend Pocket? And when you come back, I want you to tell me a story that will make me laugh.† â€Å"Yes, mum,† And that was the day that my world changed. â€Å"Remind me, why is it we're not just murdering my brother?† asked Edmund. From whimpering scribblings to conspiracy to murder in the course of an hour, Edmund was a quick study when it came to villainy. I sat, quill in hand, at the table in my small apartment above the great gatehouse in the outer wall of the castle. I have my own fireplace, a table, two stools, a bed, a cupboard for my things, a hook for my coxcomb and clothes, and in the middle of my room a large cauldron for heating and pouring boiling oil upon a siege force through gutters in the floor. But for the clanking of the massive chains when the drawbridge is raised or lowered, it is a cozy den in which to pursue slumber or other horizontal sport. Best of all, it is private, with a thumping big bolt on the door. Even among the nobles, privacy is rare, as conspiracy thrives there. â€Å"While that is an attractive course, unless Edgar is disgraced, disinherited, and his properties willfully given to you, the lands and title could pass to some legitimate cousin, or worse, your father might set about trying to sire a new legitimate heir.† I shuddered a bit then – along with, I'm sure, a dozen maidens about the kingdom – at the mental vision of Gloucester's withered flanks, bared and about the business of making an heir upon their nubile nobility. They would be clawing at the nunnery door to escape the honor. â€Å"I hadn't thought of that,† said Edmund. â€Å"Really, you, not think? How shocking. Although a simple poisoning does seem cleaner, the letter is the sharper sword.† If I gave the scoundrel proper rope, perhaps he could hang for both our purposes. â€Å"I can craft such a letter, subtle, yet condemning. You'll be the Earl of Gloucester before you can get dirt shoveled on your father's still twitching body. But the letter may not do all.† â€Å"Speak your mind, fool. As much as I'd love to silence your yammering, speak.† â€Å"The king favors your father and your brother, which is why they were called here. If Edgar becomes betrothed to Cordelia, which could happen before the morrow – well, with the princess's dowry in hand, there'll be no cause for him to resort to the treachery we are about to craft around him. You'll be left with your fangs showing, noble Edmund, and the legitimate son will be all the richer.† â€Å"I'll see he is not betrothed to Cordelia.† â€Å"How? Will you tell him horrid things? I have it on good authority that her feet are like ferryboats. They strap them up under her gown to keep them from flapping when she walks.† â€Å"I will see to it that there is no marriage, little man, don't you worry. But you must see to this letter. Tomorrow Edgar goes on to Barking to deliver the letters of credit and I'll return to Gloucester with my father. I'll let the letter slip to him then, so his anger has time to fester in Edgar's absence.† â€Å"Quick, before I waste parchment, promise you'll not let Edgar marry Cordelia.† â€Å"Fine, fool, promise you'll not tell anyone that you ever penned this letter, and I will.† â€Å"I promise,† said I. â€Å"By the balls of Venus.† â€Å"Then, so do I,† said the bastard. â€Å"All right, then,† said I, dipping my quill in ink, â€Å"although murder would be a simpler plan.† I've never cared for the bastard's brother Edgar, either. Earnest and open-faced is he. I don't trust anyone who appears so trustworthy. They must be up to something. Of course, Edmund hanging black-tongued for his brother's murder would make for a festive chandelier as well. A fool does enjoy a party. In a half-hour I had crafted a letter so wily and peppered with treachery that any father might strangle his son at the sight of it and, if childless, bastinade his own bollocks with a war hammer to discourage conspirators yet to be born. It was a masterpiece of both forgery and manipulation. I blotted it well and held it up for Edmund to see. â€Å"I'll need your dagger, sir,† said I. Edmund reached for the letter and I danced away from him. â€Å"First the knife, good bastard.† Edmund laughed. â€Å"Take my dagger, fool. You're no safer, I still have my sword.† â€Å"Aye, which I handed you myself. I need your dagger to razor the seal off that letter of credit so I may affix it to this missive of ours. You'll need to break it only in your father's presence, as if you yourself are only then discovering your brother's black nature.† â€Å"Oh,† said Edmund. He gave me the knife. I performed the deed with sealing wax and candle and handed the blade back with the letter. (Could I have used one of my own knives for the task? Of course, but it was not time for Edmund to know of them.) The letter was barely in his pocket before Edmund had drawn his sword and had it leveled at my throat. â€Å"I think I can assure your silence better than a promise.† I didn't move. â€Å"So, you lament being born out of favor, what favor will you court by killing the king's fool? A dozen guards saw you come in here.† â€Å"I'll take my chances.† Just then the great chains that ran through my room began to shake, rattling as if a hundred suffering prisoners were shackled to them rather than a slab of oak and iron. Edmund looked around and I scampered to the far side of the room. Wind rushed through the arrow loops that served as my windows and extinguished the candle I had used for the sealing wax. The bastard spun to face the arrow loops and the room went dark, as if a cape had been thrown over the day. The golden form of a woman shimmered in the air at the dark wall. The ghost said, â€Å"A thousand years of torture rule, The knave who dares to harm a fool.† I could only see Edmund by the glow of the spirit, but he was moving crablike toward the door that led out onto the west wall, reaching frantically for the latch. Then he threw the bolt and was through the door in an instant. Light filled my little apartment and I could again view the Thames through the slits in the stone. â€Å"Well rhymed, wisp,† said I to the empty air. â€Å"Well rhymed.†

The Field Of Project Management - 869 Words

There are numerous books on project management, most books are generic in nature, some are catered to the IT industry, but we feel most books fail to capture the challenges faced in executing a project in the automotive industry. Another important drawback of in the current literature is the overemphasis on tools and terminologies, for example Agile, Six Sigma, PMP, Lean, rather than the essential skills needed to successfully execute the project. In this book, we hope to provide the readers, who are practitioners of project management like us, the field of project management as a risk based decision making activity driven by leadership and initiative, continuously adapting to the changing scenarios, not a merely following executing set of steps. As project managers, we frequently are faced with changing requirements, different work scenarios and difficult decisions. We narrate a story, told to one of the author (RJS) by her five year old son, which summarizes the crux of the dynami cal nature of project management. The story is titled â€Å"A List†, part of the Frog and Toad series written by Arnold Lobel in 1972. The story is about a toad and a frog, who are friends. One day, the toad creates a list of things to do, so he can execute the task at hand in a timely and orderly fashion, which we would call a project plan. Toad starts to execute his list and everything stays on track, until the wind blows the list from his hand when was talking a walk with his friend frog, whichShow MoreRelatedProject Management Field Program Management Essay809 Words   |  4 PagesCourse: Project Management Term: Spring 2016, Class: BSCS- 7B Assignment No 1 Submitted By: Sheryar waheed (32815) Submitted To: Engr Malik Ali Question No 1: The project management field has developed in the previous 20+ years. Until the1980 s, project management basically centered around giving timetable and asset information to top management in the military. Presently the field has extended and has included more noteworthy obligation. I don t think there are numerous fields out thereRead MoreEssay Management of Field Construction Projects1856 Words   |  8 Pagesis to present and discuss the management of field construction projects. These projects involve a great deal of time and expense, so close control and management is paramount if they are to be completed within the established time and cost limitations. The term construction management is applied to the provision of professional management services to the owner of a construction project with the objective of achieving high quality with low costs. A specialist project manager organises, schedulesRead MoreCivic And Social Responsibility Of The Project Management Field1100 Words   |  5 PagesDavenport University Civic and Social Responsibility All fields of business, including the project management field holds a duty to making a conscious effort to provide back to the community. This can sometimes be overlooked in the speed and ramifications of everyday business work, yet there are still people that find ways to connect professional organizations, colleges, and business leaders together to reach out to the project management community and others to provide opportunities that all partiesRead MoreProject Management : A Relatively Young Field Of Professional Discipline1590 Words   |  7 PagesBetter? Comparing Project Management in the Years 2000 and 2008 Introduction Project management is a relatively young field of professional discipline. The history of project management has been written by Morris, 1994. It shows significant changes and development through the time, also suggesting that some area still needs identifying. Further studies and research are taken to improve project management on five major directions: project complexity, social process, value creation, project conceptualizationRead MoreA Career in Project Management1577 Words   |  7 PagesProposal This proposal on pursuing a career as a Project Manager is designed to provide research and criteria concerning elements for entering into the field of Project Management. The research will provide the essential skills and a job description of a Project manager. As background information, I have provided researched information based on the interest of being a Project Manager. The Survey results provide an insight to how some individuals pursued their careers andRead MoreProject Management Certifications : An Analysis1323 Words   |  6 PagesPROJECT MANAGEMENT CERTIFICATIONS – An analysis INTRODUCTION Projects are vital for business. Successful completion of a project determines the survival of the organization. Increasing number of organizations have recognized that to be successful they need to utilize modern project management techniques. Individuals are also realizing that to be competitive in the work environment they must develop project management skills. Hence the profession of project management is growing rapidly. InternationalRead MoreEssay on Project Management Career Summary1703 Words   |  7 PagesProject Management Career Summary Definition, Vision and Scope With todays businesses constantly embracing the technological advances that are made on a daily basis there becomes an increasing need for someone to supply the foresight, ability and commitment to ensure that these new technologies are implemented as seamlessly and successfully as possible. The Project Manager is just the person for the job. This paper will examine this career and explore the benefits of working in this professionRead MoreCertification Requirements For Project Management Essay849 Words   |  4 Pages CompTIA Project+ is a globally recognized certification for project managers. It is a requirement for many companies hiring project managers. The certification gives an employee credit amongst stakeholders and customers. It also helps in promotions or maybe getting a better paycheck than someone who does not have the certification. Standing out and shining in a career is important and CompTIA will do that for you in this field. All this goes for PMP certification t oo. In fact, Project + is a greatRead MoreWhy We Need Pmp Certification717 Words   |  3 Pagesrespected certification provided by PMI, the leading association of Project Management Professionals. With 12% increase in number of PMP ®/CAPM ® certification every year, they have been made the de-facto industry standard for Project Managers. The PMP certification recognizes your expertise in Project Management: The PMP certification tells your current and potential employers that you have a solid foundation of project management knowledge, which could be readily applied at the workplace. You willRead MoreMy Future Career : Project Management782 Words   |  4 PagesMy Future Career in Project Management Project management takes the form of many job positions and roles within a job force. Project management to some, means a person who manages a project. This is a very broad title. Project managers can manage a project that covers a new program release, an implementation of a new method, or the creation of a physical product for a customer. For me, project management is taking a task from start to finish, with the goals of the customer in mind. Three roles that

Race, Racial Segregation And Environmental Justice

Race affects the geographical location where people live. Several authors have examined the relationship between race and residential location within cities, and have come to the conclusion that race clearly determines where one resides. The thesis developed in this paper is that people of colour or Blacks usually occupy those areas in the city that are considered high risk, either in terms of how close they are to environmental hazards or in terms of how they are located in low lying areas. The concepts that will be dealt with in this paper are those of environmental racism, racial residential segregation and environmental justice. Social construction is seen as relegating people of colour to certain neighbourhoods, and while it may be accepted as the way things are, a closer assessment of the situation through research studies show that there is nothing casual about the observations, but that there is a system of racism that underlies the decisions that are made, and that accounts for the residential location of Blacks in certain parts of the city. This paper examines this idea by looking at many cities throughout the United States, which point to the same trend, to the location of lack in places of environmental hazard, whether topographical or industrial. One of the geographical characteristics of cities is the proportion of low-lying areas that exists. Studies have been carried out to examine residential segregation. The theory that was being studied was whetherShow MoreRelatedEnvironmental And Environmental Disaster Of The United Church Of Christ Commission On Racial Justice1424 Words   |  6 PagesThe number of white residents living within a mile of treatment and environmental toxic disposal facilities has increased. Environmental justice advocates have discovered the disproportionate placement of hazardous waste facilities in low-income communities of color throughout the United States. California, specifically, is a culturally diverse state with changing demographics and major issues with pollution. Although pollution and waste is a widespread problem, it has been more negatively impactfulRead MoreRacism and Social Injustice Essay1270 Words   |  6 Pagesindicators that the racial environment is changing. Environmental pollution and racism are connected in more ways than one. The world is unconsciously aware of environmental intolerances, yet continues to expose the poor and minorities to physical hazards. Furthermore, sociologist continue to study â€Å"whether racial disparities are largely a function of socioeconomic disparities or whether other factors associated with race are also related to the distribution of environmental hazards† (Mohai and SahaRead MoreEnvironmental Justice and Toxic Racism900 Words   |  4 PagesEnvironmental Justice and Toxic Racism Encouraged by diverse foundations from across the globe, The Environmental Justice movement has become one of the most important topics in the media. Europeans have used Marxist philosophy on class laddering, while non-Western countries required its encouragement in the criticism of colonialism. In the United States, The Civil Rights Movement was its forerunner. The notion of â€Å"Environmental Justice†, nevertheless, has its genesis in the resistance of blackRead MoreRacial Segregation In The Baltimore City1279 Words   |  6 Pagesme think, why is the outer baltimore more polluted than the downtown? Baltimore has a modern form of segregation that is an effect from the past.Baltimore had created public policies that would promote racial segregation,because in 1911, baltimore mayor (J. Barry Mahool) signed into law,â€Å"[a]n ordinance for preserving peace,preventing conflict and ill feeling between the white and colored races in Baltimore city,..use of separate blocks by white and colored people for residences, churches and schoolsRead MoreBeloved Environment Essay1394 Words   |  6 Pagesissue of environmental justice. Beloved tells the story of Sethe, an African American woman living before the Civil War as a slave and after as a free woman. Throughout the novel, the plot switches between the past and present, but consistently provides the reader with insight into how the environment has historically been used against African Americans. This paper will examine how the different ecologies at Sweet Home in Kentucky and at 124 Bluestone Road in Ohio address environmental justic e issuesRead MoreThe Civil Rights Act Of 19641974 Words   |  8 PagesActivists: Environmental racism raises a large concern in todays times because we are all support to be treated equal no matter what our heritages believe in. In the Title VI of the Civil Rights act of 1964, it clearly states that it prohibits discrimination on the basis of race, color, and national origin in programs and activist receiving federal assistance. Environmental racism have many things in common to the civil right activities looking back on time. Like the Warren County example, the wayRead MoreRacial Justice Of The United Church Of Christ1363 Words   |  6 PagesEnvironmental racism is the â€Å"targeting of minorities and low-income communities to bear a disproportionate share of environmental costs. It refers to any policy or practice that differently affects or disadvantages individuals, groups or communities based on race or skin color† (Schill Austin 1991). Pollution is disproportionately distributed across the country; it is also distributed unequally within individ ual states, within counties, and within cities (Schill Austin 1991). Hazardous wasteRead MoreUrban City Stereotypes Essay1920 Words   |  8 PagesStereotypes of urban cities commonly reflect the portrayal of minorities which they are seen as poor and criminals in comparison to the middle and upper Caucasian class. Such stereotypes are an effect of environmental racism. However, to divert from the spread of negative and racist stereotypes, the local government must reflect a better city. In this paper, I am going to explain the benefits of new regionalism in relation to urban cities and minorities. Having influence from Manuel Pastor and MyronRead MoreA Cycle of Struggles Endured by the African American Race1301 Words   |  5 Pagessurvival in a world that has previously, and to this day, brought many hardships and sufferings. Although America has succeeded in abolishing slavery, there are still aspects of racism and economic segregation that occur within residential areas. This being said, many individuals of the African American race become primary targets and victims to devastating economic and social disadvantages. The articles, Survival and Death in New Orleans: An Empirical Look at the Human Impact of Katrina written byRead MoreRace, Race And Racism Essay1396 Words   |  6 Pagesrhetorical commentary overview, that is used to examine and develop a better understanding of the terms, race and racism in society (critical race theory) (Stefancic and Delgado 1995, 177). By using the critical race theory and examining incidents of police misconduct, this will determine whether or not race plays a crucial factor. Additionally, this project encompasses a vast knowledge of the criminal justice system and the police departments of the United States of America. Furthermore, one must keep in

Do We Really Know - 1040 Words

Do We Really Know? Within the writing of Steve Earle’s, A Death in Texas, he tells a shorthand story about the prisoner Jonathan Wayne Nobles, and his journey of prison before the death penalty. The question asked when reading this is, â€Å"Was Jon Nobles actually rehabilitated?† Steve Earle thought that Nobles was rehabilitated and didn’t deserve the penalty he received, but I respectively disagree. There are many reasons that contribute to my thought that he was not rehabilitated. One is the buildup of rejection from his childhood into adulthood, causing him to thrive for love, affection, acceptance, and respect. Another reason is that on his death bed, Nobles still had a selfish speech, which was focused more on his feelings towards the victims and their family’s than their wants and needs of closure. Although he did get clean and changed the way he acted, being in a controlled environment rather than a regular society highly influenced this change, especially knowing th ere was no chance of getting out alive. A Merriam-Webster definition of rehabilitate is â€Å"to teach (a criminal in prison) to live a normal and productive life† which, in my opinion prison did not provide this for Nobles. On Nobles death bed speech, October 7, 1998, he proceeded to confront the victim’s families, after being told not to. He proceeded to say how sorry he was, and that he knew what he had done. He wanted the spot light, and closure for himself, even if that was affecting the family’s ability toShow MoreRelatedTeen Pregnancy, Do We Really Know The Facts?1169 Words   |  5 PagesTeen pregnancy, do we really know the facts? Do we even know the common early signs of early pregnancy? Teenagers tend to close themselves off when they find out they are pregnant. Teenagers can not predict what life will be like with a new baby. They will go through several different emotions, exhaustion, and peer pressure-related stress. Teenage mothers are more likely to have lower school achievement and often drop out of school and develop health problems and also face unemployment as youngRead MoreHow Advertising Works: What Do We Really Know?2905 Words   |  12 Pagesor brand. So how to set up an effective and positive advertisement is something that has a very high priority in every business. In order to create that positive advertising campaign you need to know what the do and don’ts are and which pitfalls need to be avoided. I consider it very important to know what advertising exactly means and what the definition of the word advertising is. Advertising is a paid form of communicating a message by the use of various media. It is persuasive, informativeRead More PMS: How Much Do We Really Know? Essay1666 Words   |  7 PagesPMS: How Much Do We Really Know? Basically, PMS has been piecemealed. Its like the story of the five blind men and the elephant. One checked the trunk, another the leg and so on, but nobody has the full picture. --Dr. Susan Thys-Jacobs (1). The Controversy There has been much controversy over the biological factors involved in the mood disorders and discomfort felt by countless women before the onset of menses. The common term for this discomfort is pre-menstrual syndrome (PMS). PMSRead MoreEssay What Do We Really Know About The Beginning Of Time?1406 Words   |  6 PagesWhat Do We Really Know About The Beginning Of Time? Most people take for granted important discoveries, such as the Big Bang. It is widely accepted that the Big Bang created the universe, and while most people can explain the basic theory behind it, little else is common knowledge. Calvin of Calvin and Hobbes called it â€Å"The Horrendous Space Kablooie,† but many people do not grasp the enormous concept (Milne). How exactly do you prove how time began? A writer for Scientific American put this subjectRead MoreHow Much Do We Really Know About Crime? Essay593 Words   |  3 PagesHow do we know about crime? A crime is an action or behavior that is made illegal. What we know about crime comes from what we see and what we hear from our peers and in the media. But how much do we really know about crime? What we see gives us some knowledge of crime. We might be a witness to a crime but this can mislead us because we may not actually witness a crime happening at all. For example, a person may see someone trying to break into a car and report it, when in reality the person lockedRead MoreIs God A True God? Essay971 Words   |  4 Pagesthen the rest of creation. An example of this would be able to be found in naturalism. When we are looking at the world through the Bible, though, things change. One topic of discussion is whether we will live eternally from the time we have come into existence or not. Do we just go into oblivion or is their a way we still exist? Well since I base what I believe from the Bible, the Bible tells us that we will live forever in heaven or in hell depending on our decisions while here on earth. ThisRead MoreWhy Do You Think It Is Important? Essay1450 Words   |  6 PagesInterviewer: Okay, I started recording, do I have your permission to record? Interviewee: Yes, you do. Interviewer: Okay, thank you so much. You asked me why I am interested in this research and I’m really curious about you too. What interested you in joining the study? Interviewee: The reason is really simple, because I know I have experience in anal sex and I am willing to share my experience contributing to any further research or maybe contribute to the awareness of gay sex. So, I thinkRead MoreVideo : Doing The Right Think By Chuck Colson Essay1144 Words   |  5 Pageswrite it down. I really do like this quote and it has a lot of meaning, but the problem I have is what is ‘unjust’? To me unjust could mean something, but to somebody I pass on the street, unjust could mean something totally different. I think the whole video has a great idea, but one guy in it said â€Å"there is no fundamental agreement on the way the world works†, and I completely agree with this. There is no agreement across the board on right and wrong. Another guy mentioned we follow our conscienceRead MoreVideo : Doing The Right Think By Chuck Colson Essay1144 Words   |  5 Pageswrite it down. I really do like this quote and it has a lot of meaning , but the problem I have is what is ‘unjust’? To me unjust could mean something, but to somebody I pass on the street, unjust could mean something totally different. I think the whole video has a great idea, but one guy in it said â€Å"there is no fundamental agreement on the way the world works†, and I completely agree with this. There is no agreement across the board on right and wrong. Another guy mentioned we follow our conscienceRead MoreThe Main Characters Of Norma And Arthur In Button Button814 Words   |  4 Pagesnot the people she knows will die, but her husband died. She finally realizes her husband’s life insurance policy for $25000; double indemnity if he died by accident. Mr.steward said about was that. â€Å"Do you really think you knew your husband?† in the end Richard Matheson teaches us that is the theme of the story, it makes me think about Do we really know each other? Do I know my parents, my good friends? When I think about Norma and Arthur, I realize people didn’t really know the people in our life

Private Peacefull Free Essays

This is a book review on the book â€Å"private peaceful. † This is the best book I have read this year. This book is all about â€Å"innocence and love, courage and cowardice† as it is clearly written on the front of the cover of the book. We will write a custom essay sample on Private Peacefull or any similar topic only for you Order Now This is a book about two brothers called Charlie who is the older brother and Tommo who is the smaller brother who go through the good side and the bad side of life because their father has died and other family issues.As they grow up they start to drift apart from each other because of a friend that they both love called molly who starts to gain love for to Charlie therefore leaving poor Charlie alone. Suddenly they have to go to war. So they pack their things say bye to their loved ones and go off to war†¦. †¦. The book ‘Private Peaceful’ written by Michael Morpurgo is a book that explores the life of Tommo through past and present throughout of his life. The reader is also introduced to Charlie the brother of Tommo and how they are different towards each other. The book is one that also explores the relationship that Charlie and Tommo have. This book tells you how someone is like as a child, and how they are when they are older. An example to me of this would be Charlie. Charlie as a child was completely different to Tommo. Charlie is a very independent person he stands up for what he believes in, basically he is brave. Charlie is responsible to look after Tommo because he is very sensitive and his small brother. Example of this is when Tommo is getting beat up by Jimmy Parsons, Charlie comes to help, in the end Charlie is the one who gets punished but he just accepts it because he is brave, ‘†¦when it’s Charlie’s turn, all you hear are the punches’p24.Charlie is a character that stands up for what he believes in and what he believes was right. It was this believing attitude that made Charlie a man and took him through life. Charlie and Tommo had a really tight relationship when they were young but as time when on it started to fade a little until towards the end of the book when Charlie knew he was going to be punished after his actions. Then it became pretty intense and their relationship that was once strong when they were young became even stronger than it had ever been.An example of this is before Charlie gets shot. â€Å"This is going to be difficult enough without tears. † He holds me an arm length away. ’pg176. The book ‘Private Peaceful’ is one that makes a change on the individual. It is a book that shows how a person is able to change throughout life over a distance of time. It is also a book that tell you how individuals can stay the same, the things learnt in childhood, is able to be carried on into adult life. Tommo and Charlie are examples of this.The author is also trying to make the reader how one mistake can change a relationship so quickly and the change it can have on somebody. The book makes people realise that even though there is often change, it is really about the keeping the relationships with the people you love and using your past to change your future. In conclusion I think that this book is a fantastic book and a very emotional book and maybe a life changing book, for some individuals. For example it tells you to keep your relations tight with the ones you love, and also learn from your mistakes in the past. By Kaiser Saeed How to cite Private Peacefull, Papers

Marine insurance free essay sample

1988 General Insurance Convention M A R I N E I N S U R A N C E R E I N S U R A N C E A N D GISG 1988 Working Party Members:Chairman: Colin J. W. Czapiewski David H. Craighead Peter A. G Green David M. Hart Peter N. Matthews Chris Mellor Hugh Rice Peter D. Smith David I. Tomlinson Marine Insurance Reinsurance An Introduction Page Index 1. Introduction 2 2. Classes of Marine Business 3 3. Types of Insurance and Reinsurance 6 4. Organisations and systems 7 5. Claims 12 6. Rating 14 7. Data Problems 21 8. Reserving 23 9. Summary and Conclusion 31 10. Bibliography 31 1 Marine Insurance and Reinsurance An IntroductionThe only major area of insurance in the UK without substantial actuarial involvement is that referred to as MAT: Marine, Aviation and Transport. Incidentally this state of affairs seems to apply to most overseas countries also. The Institute library is practically devoid of literature on the subject although the Chartered Institute of Insurance does have a fair amount of related information. This paper provides a basic introduction to Marine Insurance and Reinsurance, emphasising aspects of particular interest to Actuaries. Although Marine insurance is international, the paper concentrates upon business written in the UK and so many imilarities exist with London Market Non-Marine. Much detail that is common · to both has therefore been left out entirely or dealt with briefly. Aviation has been omitted to preserve some brevity. The paper does not describe all the business written by Marine underwriters as this includes Incidental Non-Marine. 1 · Introduction Marine business is one of the oldest areas of insurance. The current working environment has been created by historic case law with the 1906 Marine Act formulating much additional regulation and securing some standardisation of definitions.The market comprises insurance companies and Lloyds underwriters. There is some mutual pooling of risk by ship owners but this is mainly confined to PI clubs (Protection and Indemnity) covering liabilities of shipowners to cargo owners and third parties. The insurance is submitted to underwriters in a slip form, as for all London Market business, showing details such as :(i) (ii) (iii) (iv) (v) (vi) (vii) names and brief details of vessels covered value of vessels periods of cover premium rate deductions for brokerage, etc class and type of cover general conditions See Appendix for an example of such a slip.The slip is taken round the market when the underwriters commit their lines, the percentages of the risk they are willing to bear. 2 2. Classes of business There are various classes of Marine business showing different characteristics :a) Cargo This is one of the earliest forms of Marine insurance. 1600s the policies were ship, goods or ship/goods. In the Cargo insurance normally indemnifies the policyholder against loss of goods or merchandise whilst being transported from one destination to another. Cargo has formed an intrinsic part of Marine insurance since the very earliest days of trading. Usually the insurance covers cargo whilst on land also. Indeed Marine Cargo may never come near any water. Cargo insurance normally provides indemnity against loss of or damage to merchandise caused by fire or explosion, collision, sinking, capsizing, jettison, washing overboard and general average sacrifice. General average sacrifice is the deliberate sacrifice of property in a marine voyage in order to prevent the total loss of both ship and cargo (see section 4e for further details). The sacrifice could be partial, in which case a proportion of the cargo is saved, or in severe cases the whole consignment could be lost.Examples of cargo sacrifice are: (i) (ii) (iii) Goods jettisoned to lighten a ship that is stranded, so that it can be refloated; Damage caused to sound cargo by water used to extinguish a fire; Goods jettisoned to keep afloat a vessel that is in danger of sinking. Cargo insurance usually attaches from the time goods leave the warehouse or place of storage, continues during the ordinary course of transit and terminates either on delivery to the final destination or the expiry of 60 days after discharge at the final port, whichever occurs first. Most Cargo policies contain the Unseaworthiness and Unfitness exclusion clause which precludes coverage of loss, damage or expense arising from the unseaworthiness of vessels and the unfitness of containers used for the transportation of goods. The War Exclusion Clause is another common exclusion which precludes cover arising through war or war related incidents (see section 2d on War Risks). In a similar fashion it is commonplace to have a Strikes Exclusion Clause which prevents insurance cover for loss, damage or expense caused by strikes, lock-outs and other related labour disturbances. b) Hull and MachineryHull insurance omits any reference to goods or merchandise and covers only the structure of the ship. It encompasses damages to the ship from collision, grounding, etc.. Machinery is normally covered, eg engine room, etc. . This insurance covers a variety of risks from small yachts to fishing fleets to roll-on and roll-off ferries to supertankers. Normally only 80% of the value of the hull is insured with some owners effecting additional insurance for the remaining 20%. This class of business has a very short tail for TLO (total loss only) but is longer when other damages occur as delay is entailed before examination in dry dock, ) Liability Marine liability must be considered in connection with the various ? ; I clubs (see section 4b below). The various forms include:i) ii) iii) iv) death or injury to passengers, crew, stevedores and others damage to docks etc , and removal of wrecks damage to cargo collision damage not covered by hull insurance (25% for most countries plus excess over insured value) v) towage liability vi) oil pollution vii) unrecovered general average expenses. viii) fines and other penalties ix) product liability mainly for construction of ships and elated parts. x) any other public liability. d) War Risks From the earliest times Marine policies have normally covered loss from damage by war risks. Nowadays, policies normally exclude war unless specifically requested, except for Cargo. The main perils under a Marine War risks policy are: (i) Capture. (ii) Seizure. (iii) Arrests, restraints etc. , of Kings, Princes and people. More recently this contains a frustration clause which avoids payments where goods are not damaged through restraint etc. (iv) The consequences of hostilities or war-like operations.This provides the widest war cover and includes revolution, civil war, insurrection, etc (v) Political risks failure to complete contract because of political intervention, including terrorism. (vi) Derelict mines, torpedoes, bombs, etc 4 The period of cover is considerably more restricted than a normal policy and covers from loading until discharge at final destination, or for 15 days after arrival, whichever is the first. Transshipment cover is for 15 days only. War risk insurance may be cancelled by either party giving 7 days notice for hull and 2 days for cargo. War risk rates are normally 0. 25% p. a. , payable (and indeed changeable) on a daily basis, although the current Iran/Iraq gulf conflict has seen rates as high as 0. 5% p. a. If War cover is taken then often additional cover for risk of loss by Strikes, Riots and Civil Commotion can be taken although this cover can be provided separately. e) Building Risks Building risks insurance covers the ship against all risks whilst under construction, launch, trials and until delivery to the owners. Cover is also provided for liabilities through negligence. After delivery this type of cover is normally provided by ? ; I Clubs.If the ship is being repaired she may revert to a building risk. f) Port Risks If the ship is laid up or being repaired then she is insured under a Port risks policy which, like building risks, covers all risks including third parties. g) Specie Valuable Cargo such as banknotes or diamonds is called Specie. It might otherwise be difficult to provide for such items in a general cargo treaty. A well-known specie loss is the 1983 Brinks Mat bullion robbery at Heathrow Airport (a notable Marine Loss). h) Rigs Exploration rigs and oil production platforms to extract oil and gas from under the sea involve a different type of risk.No movement is normally involved. Rigs are transported from their construction site to the operation site and then commence operation. Catastrophe accidents can occur (eg Piper Alpha in the North Sea, July 1988) and very large losses can emanate, $lbn+. — 5 Much of the business is placed through the London Master Drilling Rig Policy (renamed London Master Energy Line Slip in 1988) . Energy policies are packages that cover not only the rig but also pipelines and on-shore installations. i) Yachts Including small craft. Losses result in a working level anner except when a hurricane, tsunami, etc, occurs. Then accumulation results. j) Docks Dockside buildings and structures (eg cranes) are often insured as Marine risks. k) Incidental Non-Marine These Non-Marine risks written in the marine market are outside the scope of this paper. However some Non-Marine business can be written under the 1906 Marine Insurance Act where it is expressly covered or connected to a marine risk and is deemed Marine. Pure incidental non-marine is that part of a marine syndicates capacity used to write non-marine business and has no connection to normal marine business. ) Inland Marine Most of this business relates to U. S. A. where these marine risks may cover shipment of cargo across country, insurance of bridges, etc .. 3. Types of Insurance and Reinsurance The initial policy may be written on one of a number of direct type bases:(i) time the policy commences one day and ceases at another specified date. It is irrelevant where the insured ship goes during this period. (ii) voyage the policy commences when the ship is at one location and expires when another prescribed location is reached, irrespective of the time taken. iii) time and voyage the policy covers a voyage and also time spent in port before and/or after the voyage. (iv) floating this general cargo policy covers shipments carried in a period of time. The shipments are defined during the duration of the policy. (v) Construction or building this policy insures the building of a ship no matter how long it takes. 6 Marine insurance risks may be reinsured in a number of ways. These types will be the same as for reinsurance of property/casualty:(i) Facultative this includes all risks that are individually einsured whether by an underwriter directly or by the delegation of underwriting authority. The run off of claims, from the actuarial viewpoint, will be very similar to primary business. Examples are binders, lineslips. Another feature of Marine business is the use of reinsurance on a more restricted basis than the original, e. g. Hull TLO (Total Loss Only). (ii) Treaty Proportional including quota share and surplus reinsurance. The emphasis is on the reinsurer following the fortunes of the reinsured (albeit on premium net of ceding commission). iii) Treaty Non-Proportional excess of loss and stop loss reinsurance, taking a slice of a layered programme will give a reinsurer a very different underwriting result from the reinsured. Excess of loss may be effected on each account separately (e. g. Hull, Cargo) or combined in the form of a whole account cover. The skill of the reinsurance underwriter is of great importance in setting the correct rate. (iv) Retrocessional mainly London Market Excess of Loss (LMX) reinsuring London Market companies and Lloyds syndicates marine reinsurances. In addition, retrocessional business covers the reinsurance of foreign companies reinsurance, both proportional and non-proportional. Care is necessary here because of the spiralling effect of losses. The incestuous nature of the market can turn a $5m gross loss to a $30m gross to all LMX writers combined. 4. Organisations and Systems a) INSTITUTE OF LONDON UNDERWRITERS The Institute of London Underwriters (ILU) is the body to which most companies writing London Market Marine insurance belong and the ILU provides the same sort of services to its members that Lloyds provides to syndicates. 7 -It was founded in 1884 to act as a trade association and to provide a forum for underwriters to discuss current affairs and the problems of the moment; at first Lloyds underwriters were also members but in 1909 the Lloyds underwriters Association was set up as it had become apparent that separate bodies were needed to represent the Lloyds and company markets. Matters which concern the Marine mar ket in London as a whole are still dealt with by joint (Lloyds and ILU) committees which normally have equal membership from each side and an arrangement whereby a chairman from one side will be succeeded by one from the other side. Nowadays the ILUs functions extend beyond acting as a trade association. The London Market being a subscription market where insurers each accept small parts of large risks, the ILU provides a service to its members by issuing policies signed by one of its officials on behalf of those members subscribing to the particular insurance; though it should be noted that these are policies of co-insurance and each underwriter is responsible only for the share of the risk (the line) which he has accepted.It also provides a settlement service so that brokers will make one net payment, supported by all the necessary details, to the ILU monthly (or receive one), as will each of its members. Special cash settlements, in the case of large losses, are similarly handled. At present the ILU has approximately 110 members. Membership of the ILU has always been thought to add prestige to a member and applications for membership are examined thoroughly.The accounts of member companies are carefully vette d, with associate members (those who have been members for less than 5 years, or whose ownership has changed in the last 5 years) submitting quarterly returns and providing business plans in advance. A relatively high standard of solvency is required of ILU members and where a member is a subsidiary of another (often overseas) company, a substantial guarantee is required from the parent. In consequence the ILU is able to boast proudly that no ILU company has ever defaulted on its obligations. Two years ago the ILU building was opened.This is a centre for underwriting in which member companies can rent space and most have chosen to do so. As with Lloyds this certainly makes it easier for brokers placing marine risks and probably gives a competitive advantage to those companies in the building because of the extra convenience for brokers. It has been estimated that it now takes half a day to place a risk that used to take 2-3 days. The ILU companies premium income (excluding aviation) for 1987 was around ? 1. 5bn, of which a third was cargo, the remainder being liability, energy and hull. 8 b) PI CLUBSProtection and Indemnity Clubs were formed to provide mutual insurance of the various liabilities of shipowners. The first one was founded in 1855. The concept is that shipowners pay a standard rate per ton and this is adjusted to reflect the experience. However, divergence has resulted in individual rating by the clubs full time management. Payment is by initial deposit with later adjustment. The policy year traditionally runs from 12. 00 noon on 20th February (this date relates to the annual resumption of Baltic navigation). The reinsurance arrangements for 1988 are as follows:(i) club retention US$1. m per loss, (ii) pool of $12m xs $1. 2m per loss amongst members of clubs, (iii) outwards reinsurance of $lbn xs $12m. ? ; I club work has changed with shipping becoming big business. Expenses of running ? ; I clubs are normally met by fees. Claims are rising because of:(i) (ii) (iii) (iv) increasing social awareness, increasing legislation, increasing wages and costs (incl legal fees) more hostile and business-like Marine insurance environment. The annual premiums taken by ? ; I clubs is around $650m, while a breakdown of claims paid is roughly:Cargo Personal Injury Pollution Remainder 45% 20% 10% 25% ; I clubs differ from companies in the way they get directly involved in helping shipowners manage the risk, advising on contracts, providing legal assistance in claims and organising reports and conferences to increase their awareness. Their history has enabled ? ; I clubs to be strong, both technically and financially, as well as flexible to changing market conditions. C) LLOYDS UNDERWRITERS ASSOCIATION'(LUA) Lloyds is now estimated to insure about 25% of world shipping and marine forms about 30% of Lloyds total business. Few major marine risks in the world are placed without at least checking terms quoted in the London market.LUA represents the interests of Lloyds marine underwriters at Lloyds and provides half the members of committees such as the Joint Hull Committee and the Technical and Clauses Committee; the latter ha s during the early 1980s replaced the ancient Lloyds policy form with a new simpler version. 9 d) LLOYDS POLICY SIGNING OFFICE (LPSO) After a risk has been circulated around the Underwriting room at Lloyds, and each participating Underwriter has signed the slip indicating the share he wishes to accept, the details are checked and the policy document is prepared and signed at LPSO. As ocuments are passed backwards and forwards between the broker and LPSO for agreement and queries are resolved, there is generally 2 to 3 months delay between risk inception and policy signing, but it is the latter date which determines · the underwriting year of account to which premium and corresponding claims are allocated. LPSOs principal functions are:i) To check transactions and sign policies and endorsements ensuring that the terms on the slip are correctly followed through and that various Lloyds and statutory requirements are met. ii) To provide a central accounting scheme whereby monetary ransactions between the many syndicates and brokers are settled on a balance basis. Settlements were made at regular fixed intervals with specific terms of credit until the recent introduction of flexible settlement whereby the settlement date is agreed at the time of placing the risk. LPSO effectively acts as a clearing house collecting premiums and paying claims and refunds, including syndicate reinsurance transactions, once agreement has been reached between broker and lead underwriter. iii) To extract and record accounting and limited statistical information on a per policy basis for use by brokers and nderwriters. The records are made available both in a form suitable for data processing (on punched cards and magnetic tape) and also in a visual narrative form on the aforementioned cards. iv) e) To provide statistical files for use by various Corporation of Lloyds departments. LLOYDS UNDERWRITERS CLAIMS ; RECOVERIES OFFICE (LUCRO) LUCROs main function is to provide an integrated claims and recoveries service for Lloyds marine business and has absolute authority from the vast majority of Lloyds Marine Underwriters to administer and settle claims on their behalf. Claims are andled on the various risks written by Marine Underwriters including Non-Marine, Aviation etc. LUCRO also operates a computer system called OMCAS (Outstanding Marine Claims Advice Scheme) which enables the underwriters to be kept informed of any outstanding claims amounts advised. 10 Once the broker has been informed of a claim occurrence he advises LUCRO who will act to minimise the loss, pursue any queries arising and also give appropriate instructions so as to preserve any rights of recovery where an occurrence involves a third party. LUCRO enter details of Marine claims and recoveries into the central accounting system.LUCRO administers both direct and reinsurance claims through th ree claims sections (i. e. Hull, Cargo and Reinsurance) and has a fourth section dealing with cargo recoveries. The Hull section ensures that salvage recoveries arising on a hull claim are pursued by the assured but cargo recoveries are pursued by the Recoveries section of LUCRO. The latter section follows up on subrogation rights (i. e. the insureds rights against third parties acquired by the insurers on providing the insured with an indemnity) for both Lloyds Marine underwriters and Insurance companies.It charges fees only for successful recoveries, liaises with the cargo claims section and the Salvage Association and protects cargo interests involved in general average* and salvage. It also issues and settles Corporation of Lloyds General Average Guarantees. LPSOs claim role is limited to processing advices and settlements for brokers and underwriters via the central accounting system using details already entered into the system by LUCRO. * f) Average in marine insurance means partial loss; particular average is loss affecting one particular interest in the marine venture, i. e. articular to the hull or to the cargo interest. General average is a partial loss that is general in its effects, i. e. it is not borne by the owner of the damaged items alone but shared by all the interests involved. A general average guarantee promises that the cargo underwriters will eventually pay the required general average contribution when a loss has been finally adjusted; by law the ship owner has a lien on cargo until its general average contribution has been settled but in practice cargo is released either on payment of a deposit or on the underwriters provision of a guarantee. LLOYDS REGISTER OF SHIPPINGNearly half the worlds ships are classified by Lloyds Register; other marine craft such as oil rigs may also be included. When a new risk is proposed to a Hull underwriter he is likely to refer to this Register for important details of the ship. The Register is entirely separate from the Corporation of Lloyds and is controlled by a committee drawn from a wide range of shipping interests. Ships reaching a certain standard are classified and others may be included without classification; certain vessels are specially designated to show their plans were approved before work began and were surveyed at every stage of construction.For a ships classification to be maintained, annual surveys are required with a special survey every fourth year. 11 Some ship owners may not wish to meet the cost and vessels may appear in the Register with different symbols if surveyed by other bodies; some foreign standards do not match Lloyds and this is a matter to be considered in rating a risk. g) SALVAGE ASSOCIATION The Salvage Association is a non profit-making body which has over 100 surveyors around the world and its main role is to assess the nature and extent of damage to a ship or cargo and recommend appropriate repairs or salvage.Association surveyors are often involved where a warranty to a policy requires a surveyor to approve fitness of a vessel for proposed activity, in negotiation of ship repair contracts, in checking stranded cargo and in approving arrangements for the laying up of ships. h) ASSOCIATION OF AVERAGE ADJUSTERS This is a professional body which is very important in marine insurance and members follow the Associations Rules of Practice which have been built up over many years.Nearly all claims for damage to ships and general average claims are adjusted by them, whereas cargo and total loss claims tend to be more straightforward and can often be handled by brokers. i) PSAC Although the London Market, non-Lloyds, Policy Signing and Accounting Centre system has the capability to process Marine business, little is transacted this way. Most companies use the ILU systems instead. 5. Claims The handling and settlement of marine claims follow the same general principles as any other class of non-life business.There are, however, a number of basic differences of which an actuary should be aware even though they may not directly affect his work. (a) Legal Framework As mentioned earlier, unlike any other classes of business, marine insurance is governed by an Act of Parliament the 1906 Marine Insurance Act. This contains highly detailed clauses on warranties, the measurement of indemnity, the insurers rights of subrogation etc. For example, sections 45 and 46 deal with changes of voyage or deviation from voyage contemplated by the policy saying the insurer is discharged from liability rom the time when the determination to change it (the voyage) is manifested; and it is immaterial that the ship may not in fact have left the course of the voyage contemplated by the policy when the loss occurs. 12 In practice the Act has had a worldwide impact; some of its words and principles are embodied in international conventions such as the 1974 York-Antwerp rules on general average. There are two main results of this legal framework: standard policy wordings are almost universally used, and case law in claim settlement is more important than in other classes of business. (b) Sum Insured and Insured ValueThese terms have distinct meanings. For example a hull policy may have a Sum Insured of ? 8m on an Insured Value of ? 10m, which means that the insurer pays only 80% of each loss. The Marine Insurance says that, providing there is no fraud, the value fixed in the policy is conclusive of the insurable value. Market values of ships can fluctuate wildly, particularly those of oil tankers and rigs which are affected by wars and OPEC decisions. The Sum Insured that is paid out on a total loss may therefore exceed the market value of the ship at the date of loss. Marine claims are not, therefore, always settled on an indemnity basis. c) Total losses There are two different types of Total Loss defined in the 1906 Act. Actual Total Loss is where . .. the subject matter insured is destroyed, or so damaged as to cease to be a thing of the kind insured, or where the assured is irretrievably deprived thereof. Constructive Total Loss is where the subject matter insured . .. could not be preserved from actual total loss without an expenditure which would exceed its value when the expenditure had been incurred. Hull policies covering war risks usually have a clause allowing the insured to claim a CTL if he has been deprived of use of the ship for a period of 12 months.In each case the Sum Insured becomes payable plus, in some cases, various expenses incurred by the insured (sue and labour charges etc) . One major difference between ATL and CTL is that to claim a CTL the insured must give a formal Notice of Abandonment to the insurer. There is a problem when the Insured Value exceeds the market value of a ship; eg market value ? 8m, estimated cost of repair ? 9m, Insured Value ? 10m. Strictly this is not a CTL as, within the terms of the policy, the insured could claim the ? 9m cost of repairs.A Compromise Total Loss payment is made; it involves negotiation and can exceed the ? 8m market value. 13 (d) General Average General Average has already been referred to in sections 2(a) and 4(e). The Marine Insurance Act says There is a general average act where any extraordinary sacrifice or expenditure is voluntarily and reasonably made or incurred in time of peril for the purpose of preserving the property imperilled in the common adventure. General average is common in the settlement of marine claims, and the basic concept is simple. Application of it can become omplicated, and there is a large amount of case law, particularly concerning the meanings of extraordinary, voluntarily, reasonably and imperilled. For example, jettisoning cargo in the mistaken belief that there was a fire in a lower hold has been held not to be a General Average act; the property had not been imperilled since there was, in fact, no fire. (e) Reinstatement Premiums As in all classes of non-life business, a claim on an outward non-proportional cover will usually result in the payment of a reinstatement premium. A distinctive feature of marine business is that it is common to have very low retentions.As a result the net claim that an account has suffered from a major market loss can be highly misleading, with over 90% of the bottom line impact may arising from the reinstatements! Unfortunately, where an outstanding claim carries a case estimate, it is highly unlikely that any statistics show the corresponding liability in respect of reinstatement premiums. In any work on claims the actuary should consider whether he should assess the reinstatements, but here are difficulties: reinstatements may not be identified as such in the computer, they may be dentified but not reported separately, they may not be capable of being linked to the claims that gave rise to them etc. However if the insureds business is reinsurance then reinstatement premiums may also be received. Thus some degree of cancelling out may occur. 6. Rating (a) 1. HULL RATING Hull and Machinery Factors include: i) ii) iii) iv) Type of vessel Size of vessel Type of machinery and automation Date of last survey, classification symbol Classification societies vary in the standards to which vessels are surveyed and the underwriter will take account not only of the classification symbol given but the status f the society; Lloyds Register of Shipping has the highest standing (see 4f) 14 ?) vi) Age of vessel Repair costs As the shipowners insured value will reflect the earnings potential of the vessel the underwriter must consider repair costs separately. Older vessels tend to be more expensive to repair but are more likely to give constructive total loss (which arises when damage is such that repair costs exceed the vessels insured value) if low insured value; conversely highly valued modern vessels are less likely to give CTL and thus repair costs will assume more importance. vii) Country of registration, flag of convenience iii) Si ze of fleet 2. Insurance Factors include i) ii) Past claims experience Conditions of Insurance i. e. whether Full Risks, Total Loss Only etc. , and size of deductibles. iii) Insured value Unduly high values on old vessels in shipping recession would be avoided as would values which appear too low in relation to similar vessels. An alternative course in the latter situation is to insert a higher valuation for the purposes of constructive total loss. 3. Other Factors include i) Trade routes and limits ii) Cargo carried iii)Management quality and ownership 4. (i) Conditions of Insurance FULL RISKSPremium to cover: 1. 2. 3. 4. 5. 6. Total Loss Particular Average (Accidental Partial Loss) General Average Contributions Collision Liability (Running Down Clause) Salvage Charges, Sue and Labour Charges Profit Common practice is to produce a premium rate (excluding total loss) per deadweight ton (deadweight tonnage is usually proportional to dimensions of the vessel) which is re-expressed per unit of insured value for that vessel and added to a rate per unit of insured value for the total loss aspect. Specialised vessels may require a different approach to the size of risk and small risks require a minimum premium.Also the dominant elements of pricing structure vary with type of vessel, since e. g. a large tanker may produce very high salvage charges whereas a ferry account may produce a high exposure to particular average owing to frequent dockings as well as greater collision exposure. Where frequent machinery claims occur a machinery deductible additional to the normal deductible may be applied. 15 The three-quarters Collision Liability or Running Down Clause generally used on hull policies covers liability incurred for damages to the owners of any other vessel and its cargo arising from collision due to the insured vessels negligence.Cover is limited to 75% of such liability and also to 75% of the insured value of the vessel in respect of any one collison. Liabilities covered relate only to other vessels or property on other vessels; loss of life, personal injury or illness are not covered and are met by ? I clubs, as is the residual 25% collision liability. Sue and Labour charges are incurred by the assured in complying with his duty to avert and minimise any loss r ecoverable under the policy, and are recoverable from the insurer. ii) TOTAL LOSS ONLYSome underwriters specialise in writing TLO conditions giving cover for Total and/or Constructive Total Loss and additionally Salvage etc. charges. A vessel may be insured directly for TLO or, if insured on wider conditions, the direct writer may reinsure the TLO part of his risk. iii) LIMITED CONDITIONS This is intermediate between full risks and TLO and may cover all aspects except partial loss. Obviously, the underwriter must seek to maintain consistency when quoting rates for various conditions of insurance on the same risk or when asked to extend the perils covered. Disbursements and increased value covers allow for expenses f fitting out the vessel, stores etc not included in the hull valuation and an amount up to 25% of the hull value may be insured against total loss. Similarly freight (the vessels earnings) may be insured with a limit of 25% of hull value for the sum of Freight and Disbursements etc. Since a shipowner may insure on full risks for an amount much lower than the true value and the balance under total loss only at a much reduced premium the net result is to obtain almost complete cover at low cost; this is the reason for the 25% limit and no such limit exists for additional insurances which do not include total loss cover. 16 Shipowners other insurable interests are: Insurance premiums these can be insured on TLO conditions for the full amount reducing pro rata over the policy period. Loss of Hire where a vessel is on charter, the hire money for a fixed period often 90 days is covered for all risks excluding total loss. (b) CARGO RATING Major factors:i) ii) iii) iv) v) Vessel (age, classification, flag) Voyage (distance, climatic conditions, port facilities) Nature of Cargo, packaging and stowage Shippers management quality and past claims experience Conditions of InsuranceRegarding the structural condition and fitness of the vessel the underwriter will rely on t he latest assessment given in the register of an approved classification society; under open covers, as the vessels identity is not known in advance, a classification clause is included requiring all vessels used to meet the highest class standards given by any one of the specified societies. Age is often restricted to 15 years maximum in the clause and 25 years for liners (vessels operating to a regular advertised itinerary). Failure to meet these standards requires additional premiums and/or altered conditions of insurance.As with hull rating the ships flag governs standards of construction and crewing and a flag of convenience may indicate lower operational standards. Inferior ship management especially in stowage can be the cause of many damage problems. Voyage includes port of loading and unloading and port facilities; reputation for cargo handling, average delay in customs, degree of security against theft etc. are considered. Additional handling risks are involved where transshipment is necessary; distances from ports, methods of transport and storage are involved in the extended risk of delivery to final destination or 60 days after discharge at port.Significance of climate conditions varies with size of vessel since larger ships will be less affected by heavy weather. Type of commodity affects susceptibility to major hazards such as fire, explosion, water damage and the possibilities of controlling damage once it occurs. Effective packaging and storage can minimise the impact of damage, especially to fragile goods, and help resist water damage. 17 Insurance conditions normally fall into one of the three categories:i) Major hazards only covering fire, explosion, stranding, sinking, collison etc.General average and salvage charges are covered. ii) Major hazards plus partial loss involves extension of above cover to heavy weather damage (i. e. washing overboard, entry of sea, lake or river water into vessel), earthquake and lightning, total loss of any package overboard or dropped whilst loading and unloading. iii) All risks extends cover to include breaking, scratching, denting; theft, pilferage and non-delivery? contamination and all types of water damage including rain water. War and strikes etc are of course excluded and are charged for separately (see 2d). (c) Market AgreementsAs with most large general business insurances, competition the number of potential insurers seeking to write the business is probably the single most important factor in deciding the level of rates. The Marine market is international and, with modern communications, a broker will be able place some or all of a risk in a number of different parts of the world so that fresh capacity will lead to a fall in rates and a reduction in capacity will have the opposite effect; in turn changes in capacity will be prompted by profitability or otherwise but with unpredictable time lags.For their part, insurers will hope to have a continuous relationship with the insureds so that they give cover over an extended period, rather than looking at individual years of insurance; in a soft market the decision is sometimes whether to continue on a certain risk at the current rates rather than to decide on a rate to be charged. In the London Market there are certain agreements on r ating principles, primarily in respect of Hull business. These agreements seem to be a response to the way in which the London Market differs from others.Instead of a Marine Market consisting of, say, six large insurance companies, there are well over one hundred independent underwriters in London and it is only the existence of market agreements that avoids the necessity of mergers or combinations into underwriting pools given the size of the international Marine Insurance Market there would still be plenty of competition even if this happened to the London Market. 18 The agreements on Hull insurances are. administered by the Joint Hull Committee which consists of sixteen members, eight from each of the ILU and Lloyds.The key agreements are the Respect the Lead agreement and the Joint Hull Understandings. Formally, both agreements are confidential but in practice they are available to anyone in the Market. All members of the ILU subscribe to all market agreements, as do nearly all Lloyds syndicates. In practice, the agreements do not prevent the completion of slips led by non-signatories, at least in a soft market, although it would appear that this is only possible because some of the following market is not complying with the terms of agreements to which it has subscribed.The Respect the Lead agreement is shown at the end of this section. While it could manifestly be anti-competitive in different circumstances, it does not appear to be so in its present context. The principal effect is that for each risk there are four leaders who can become knowledgeable about it with the passage of time, and the following market feels confidence in the underwriting, and is prepared to follow on that basis.The Joint Hull Understandings comprise a lengthy document and relate to rating principles and to the rating process, and to the dissemination of information on rating levels. Since there are so many Marine underwriters in the London Market, most of whom will be taking small lines on a number of risks (and this is quite different from other markets), the market is fragmented; it should also be realised that all business is handled through brokers. All this means that there is a need for information to be circulated.There is also a need to delegate to leading underwriters many of the decisions which need to be taken; it is usual for all changes to an insurance during a policy year to be decided by the four leaders two from Lloyds and two companies and to be binding on all following underwriters, and the following market may be more likely to accept these conditions if it is known that the leaders are required to follow a certain procedure designed to protect underwriters interests. 19 -It is also possible that followers will be persuaded to subscribe to risks because they know that the leaders will follow the Joint Hull Understanding thus giving some assurance that the business is properly rated. The procedural points are of importance in establishing confidence in the leaders underwriting. The submission of statistics in a standard format (of which a copy is attached) is designed to see that insureds, or their brokers, cannot select the statistics to be submitted to the underwriter.Similarly provisions requiring the leaders to meet to consult if there is a disagreement may sound somewhat trivial but it has a real purpose; if the leaders do not meet in person they will be left to resolve disagreements through the intermediary of the broker, who is, of course, the agent of the insured whose interests he is required to further! The Joint Hull Understandings do not, in fact, set any rates as such. When a risk first comes to the Market any rate may be harged. At renewal, the broker is required to submit statistics in the standard form. At this point there is a formula (see attached for a graphical representation) for the percentage change to be applied to the previous years rate, depending on the results to date of the insurance. These percentages are different for five di fferent classes of fleet singletons, value less than $50m, value between $50m and $150m, value between $150m and $400m, and value over $400m.If the terms agreed by the leaders are not in accord with the formula, they are required to inform the Joint Hull Committee in the case of the last two classes, and to apply to the Chairman or Deputy Chairman of the Joint Hull Committee for permission in the case of the other three classes. There are also market agreements in other classes of business but not to the extent of those in respect of Hull business.The War Risks Rating Committee advises on Cargo war rates but the Hull War Rating Committee was disbanded some time ago; the comparatively recently formed Joint Excess Loss Committee has been active in producing recommended wordings but does not deal with rating. RESPECT THE LEAD UNDERSTANDING (HULL) 1. To agree to respect the existing Lloyds and I. L. U. Company lead and only to subscribe to slips on terms agreed by such existing leaders. Further, to agree not to subscribe to any slip unless all four Leaders (two Companies and two Lloyds) are ignatories of this Agreement except where a non-signatory was a Leader prior to the signing of this Agreement. 20 2. In the event of disagreement between the Leaders over the renewal terms the majority view shall prevail but where the Leaders are evenly divided the case shall be submitted to the Joint Hull Committee for adjudication. 3. A change of conditions is not to be cause for a change of lead unless existing Leaders are not prepared to quote on revised terms. 4. Where a risk has been out of the Market (Lloyds and I. L. U. ) for less than 3 years and returns to the Market the previous Leaders must be considered as Leaders on its return. 5. Where there are two or more separate placings on some or similar terms, Leaders of both or all slips to consult on renewal terms. 7. DATA PROBLEMS Marine insurance, whether of direct nature or by way of reinsurance, has always formed a core part of the London market. As such it is subject to all the usual methods, requirements and constraints of that market.However, the Marine market is much more traditional than other sections of the market, more steeped in old practices and subject to both legislation and numerous legal precedents that are unique to it. Arising from that background there are two special factors that are involved and which have a bearing on data capture. (i) While the whole London market had been slow and in may ways deficient in the full recording of outstanding claims, even on inwards business but even more on outwards reinsurance of the excess loss protection type, the Marine market has been lower than most other sections. It is only now that the Marine market is trying to come to terms with the proper recording of outstanding claims. Previously only large losses were tracked and it is still the exception rather than the rule for the outstanding notification on Marine treaties to be recorded in the books of accounts. Hence i n any work carried out in regard to Marine Syndicates, whether for purposes of reserving or any other purposes, it must be realised that either there are no outstanding claims recorded at all, or those claims which have been recorded are only part of the otal picture. Even more so is it the case with Syndicates or Companies underwriting LMX type business. They will have received advices of the large claims but not necessarily of small claims and the small claims may be building up on an aggregate basis. This obviously necessitates an IBNR reserve for known but not reported claims. 21 (ii) The recording of fleets has specific difficulties and these difficulties affect Underwriters and Brokers in different ways:Brokers It is normal for individual ships to be mortgaged separately from the Fleets as a whole.Hence the Brokers must retain the ability to issue policies covering individual ships to form part of the mortgage documents even though the actual coverage may exist as part of a Fleet coverage or of several Fleets. Underwriters It is useful to be able to record the ships under a Fleet insurance for a number of separate reasons:(1) Rates are charged per vessel and since vessels can be sold or transferred with new ones continually being added to the Fleet during the year the premium requires to be worked out on a rate basis. (2)There are always some bad eggs about with high claims records. Very often such ships change hands from one owner to another, even from one flag to another, without it always being evident to the insurer precisely which ships are involved. The difficulty is compounded by the fact that not only does the name of the owner change but also the name of the ship. Lloyds confidential register (which gives details of individual ships, such as owner, flag, tonnage and position) does not track the identity of ships from one name to another. That can be achieved through Lloyds confidential nformation by means of a unique number which is held on the database and which remains unchanged. For one reason or another those unique numbers are not shown in the printed books but can be picked up only by means of tapes or electronic data exchange. (3) If a loss occurs, particularly if a vessel is lost, the Underwriter may be involved in claims through a number of risks and from various sources. He may carry part of the hull insurance. He may carry some liability insurance on a totally different risk. He may well have cargo insurance coming through on a proportional treaty or on a cargo lineslip.All those need to be put together, both for general information as to his loss and for purposes of claiming under reinsurance outwards. Hence there is an advantage in recording the names and identity of all the ships on every Fleet covered. However, it is a substantial task. Even if data is received by electronic means from Lloyds Shipping Information, the exchange at present can be arranged only on a quarterly basis and in practice many are updated only from time to time. 22 One policy may cover one Fleet or two or three Fleets or parts of Fleets or individual vessels. There is no easy method f handling the data and it is only the largest Syndicates and Companies that wish to adopt a fully professional stance as far as capturing the full data of every ship on the risk. 8) RESERVING a) There are various aspects of the handling of marine business in the London Market which cause some difficulty when using normal reserving methods. These include:- i) recent tendency to change the extent of use of noted claims reserves. As already indicated, the marine market has traditionally recorded relatively few claims, relying on IBNR to provide for the liability for all but the major osses. With the introduction of the Lloyds LUCRO (OMCAS) computer systems, there is a tendency for a much greater body of noted outstanding claims reserves to be advised, as a result of which there may be a major discontinuity in the incurred claims development pattern. This is a more serious version of the problems of inconsistency in reserving for known claims which have affected marine business in the past. These factors may preclude the use of incurred claims based methods of reserving, leading to heavy reliance being placed on paid loss information which should remain unaffected. i) some evidence of inconsistency in the use of Lloyds audit codes. In particular it does not appear to be uncommon for claims paid under one audit code to be recovered from reinsurers under a different audit code, usually ? (Time). In addition, there have, over the years, been additions to the list of audit codes, the most recent of which is the use of CF (Contract Frustration) as a separate code rather than including such business in the War account. Such changes result in changes of use of some of the older codes in addition to the introduction of the new ones. This may esult from insurance of new types of risk (e. g. Oil Rigs). A general consequence is that severe doubt may be thrown on the validity of applying methods based on old data by audit code to the on-going portfolio. This will relate specifically to the accuracy of results based on Lloyds audit percentages, used, as indicated above, by both Lloyds syndicates and, to some extent, marine insurance companies. The effect on the use of the Benjamin method of reserving is also potentially significant; cases have been found where the effect of the problem can cause the total net claims aid for audit code ? to become negative, although this is the extreme case. 23 iii) The purchase, particularly around 1980, of so-called tonner reinsurance policies under which the recoveries do not directly relate to specific claims on the reinsureds portfolio, but to the total tonnage of ships or aircraft lost in the year. These were purchased originally as a means of protecting a portfolio with a substantial marine excess of loss treaty account under which there was little knowledge available of the precise vessels covered. They were, however, subsequently used, or bused, as a vehicle for adjusting the underwriting results. Irrespective of the reasons it is usual for the premium to be processed as a reinsurance premium and the recoveries to be processed as reinsurance recoveries, which can lead to a situation in which either net premiums or net claims, or both, are negative for the audit code or codes concerned. Even where this extreme situation is not reached, the figures can be sufficiently distorted as to make the use of audit code based methods extremely dangerous. If possible, removal of the ffects of these reinsurances appears to be the best approach. b) Reserving Techniques Generally, non-marine reserving techniques may be applied to marine business. However, one of the principal features of the marine market is the relatively limited emphasis placed on outstanding losses. Although the brokers handling the business may set up files for particular claims, there is a tendency for the underwriters involved to record and set up reserves only for the larger items on which they receive notification. This causes problems, especially for Marine Liability.This practice differs from non-marine where reserves are usually set up for most, if not all, claims on which notifications is received. It is not obvious why this difference exists but, given the lack of any clear distinction between whether the risk is marine or non-marine, it can lead to the situation in which marine and non-marine underwriters are involved in the same claim, but only the non-marine side carries a reserve for it. Consequently there is a somewhat greater need for IBNR reserve on the marine side, all other things being equal.On the other hand claims for which reserves are held are generally reserved at a fairly cautious level. 24 i) Lloyds audit percentages These percentages are derived by actuarial review of the total Lloyds Marine business. The marine account is analysed into a considerable number of classes for the purposes of Lloyds minimum audit calculations. These are Time, Time T. L. O. (Total Loss Only), Voyage, Marine Liability, Yachts, War, and Contract Frustration in addition to the non-marine and aviation audit categories which often also appear. Most of the marine categories are relatively hort-tail (although losses can take 20 years to settle), even marine liability generally having nothing like the extreme length of tail experienced in its non-marine counterpart. In fact, the Lloyds minimum audit percentages (based on net premium income) suggest that marine liability claims are 50% settled by the end of year 5, and that for most other categories, the claims are at least 90% settled by the same stage of development. It may be wondered why it should be that there are so many audit codes for marine business with relatively small differences between the audit percentages, whilst there was ntil recently only one non-marine category for a vast variety of business which could not be strictly identified as short-tail. This probably reflects the fact that Lloyds started in the marine market and in some respects remains geared up more towards the marine side of the business. Although Lloyds audit percentages are little used for Non-Marine business outside Lloyds, in Marine business the level of reserves implied by Lloyds audit percentages is often used as a yardstick or measure (e. g Reserves might be described as: One and a quarter times Lloyds audit).In practice, the reserves implied by the Lloyds audit percentages may turn out to be more than sufficient or to be grossly inadequate and there is no substitute for a thorough analysis of the business for which reserves are being estimated. 25 It is only to be expected that, if the business is very different from that written by the average Lloyds syndicate, different levels of reserving will be appropriate. Furthermore, if reserves are being established after what is effectively a different development period it should be no surprise if different levels of reserve are required.This would occur if, for example, a portfolio of business was predominantly reinsurance so that transactions were becoming known to the reinsurer somewhat later than to the reinsured. It should also be realised that it is normal at Lloyds to assign a risk to the underwriting year in which the risk is first closed; this means that a port folio of Lloyds business will have had an average of three months more development than will a similar portfolio whose risks are assigned to the underwriting year in which the risk commences.If reserves are being established for a portfolio of Marine excess of loss business it is particularly important to discover what the original policies covered. Business accepted in the seventies and early eighties may well be found to include all kinds of long-tail non-marine casualty risks (e. g. asbestosis; accountants professional indemnity; pharmaceutical products liability etc. ) In such cases, of course, it is virtually irrelevant that the business has been classed as Marine. ii) Benjamin/Eagles methodThe Benjamin/Eagles or Benjamin method essentially involves projection of an ultimate loss ratio for each underwriting year using the regression line of ultimate loss ratio (ULR) against paid loss ratio (PLR) at the appropriate development year. The observed values for the regression are taken from earlier underwriting years which are fully developed or where the ultimate position is capable of estimation with reasonable accuracy, using either the insurers own data or overall market experience.The Benjamin method has some advantage over the use of Lloyds minimum audit percentages, in that it takes into account the claims paid to date in the projection of the outstanding liabilities; thus it effectively uses a combination of the net premium income and the net paid claims as a basis of projection. The method was originally developed for application to the Lloyds audit classifications, and in this context, it would suffer from similar problems to the minimum audit percentages. There is, however, no reason why the method should not be applied to any block of reasonably homogeneous marine business. 26 One particular advantage of the Benjamin method is its ability to give some indication of variability in the account being reserved. The method, based on Lloyds market formulae (which are shown on the following pages), works as below. Suppose at 31 December 1987, the 1983 marine liability account has net premium income of ? 100,000 and net paid claims of 50%, then the ULR% = 1. 843 ? PLR% + 6. 04 = 98. 19% with a variation of between -26. 24% and +26. 24%. Based on current net premium this requires a reserve of ? 48,190 + or ? 26,240.With Lloyds it is frequent for premium adjustments after development year 3 to be netted off against paid claims, and if this is performed consistently the method automatically allows for these future premium adjustments. Otherwise an estimated ultimate premium income figure should be used in estimating the reserve and the path. 27 Benjamin Formulae, based on Lloyds Market Data Min Audit % at 31. 12. 87 MARINE TIME YEAR SLOPE 1 2 3 PLR PLR PLR PLR PLR PLR PLR PLR PLR PLR 4 5 6 7 8 9 10 * X X X X X X X X X X CONSTANT (%) 1. 565 1. 125 1. 254 1. 127 1. 054 1. 099 1. 052 1. 030 1. 018 . 010 + + + + + + + + + PATH (%) 59. 46 38. 76 10. 79 8. 13 7. 75 0. 38 0. 00 0. 00 0. 00 0. 00 16. 36 22. 97 5. 39 4. 10 5. 96 2. 74 2. 00 2. 00 2. 00 2. 00 or noted outstanding claims if greater. 28 75% 45% 28% 16. 5% 11. 5% 7. 5% 6% 3% 3%* mm MARINE LIABILITY Min Audit % at 31. 12. 87 YEAR SLOPE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 PLR PLR PLR PLR PLR PLR PLR PLR PLR PLR PLR PLR PLR PLR PLR PLR X X X X X X X X X X X X X X X X CONSTANT(%) 1. 000 1. 000 1. 000 2. 739 1. 843 1. 695 1. 486 1. 343 1. 244 1. 174 1. 124 1. 089 1. 063 1. 044 1. 031 1. 021 + + + + + + + + + + + + + + +PATH 94. 40 85. 80 72. 10 7. 42 6. 04 1. 09 0. 00 0. 00 0. 00 0. 00 0. 00 0. 00 0. 00 0. 00 0. 00 0. 00 34. 90 36. 60 36. 40 20. 16 26. 24 15. 03 12. 00 10. 00 8. 00 6. 00 4. 00 3. 00 2. 00 2. 00 2. 00 2. 00 29 (%) 95% 85% 75% 60% 50% 40% 30% 20% 15% 10% 7% 4%* VOYAGE Min Audit % at 31. 12. 87 YEAR 1 2 3 4 5 6 SLOPE PLR PLR PLR PLR PLR PLR x X X X X X CONSTANT (%) 1. 661 1. 040 0. 981 0. 975 0. 973 0. 977 + + + + + + PATH ( ) % 21. 19 17. 13 9. 70 5. 77 3. 98 2. 92 22. 59 8. 12 5. 48 4. 62 2. 85 3. 32 55% 25% 10% 5% 3%* WAR Min Audit % at 31. 12. 87 YEAR 1 2 3 4 5 SLOPE PLR PLR PLR