The Titanic: Willis at the Heart of the Marine Industry for Over a Century

 The original underwriting slip for the Titanic, courtesy of Lloyd’s Following on from yesterday’s 100 year anniversary of the Titanic disaster, Rachel Wilkinson, Operations Manager, Willis Marine, discusses how Willis was at the heart of an unprecedented claims process, and considers the changes in the marine insurance market over the century.

“Even bigger, even faster, ever more palatial trans-Atlantic liners dominated the shipping scene of the early 20th century. These ever larger ships, obviously, had rising values which were increasingly difficult to place. By 1912, Willis Faber had a huge Marine account and was, as is still is the case today, known as the world’s largest Marine broker. Willis had a reputation for being able to cope with high values and for placing the largest ships coming on to the market, including Cunard’s Lusitania and Mauretania in 1907, both weighing in at 31,000 GT. With The Titanic and her sister The Olympic at 46,000 GT, Willis seemed the obvious choice for White Star Line. Both vessels were covered on the same Hull & Machinery slip, valued at £1 million each and supported by 80 underwriters. It was clearly a challenging risk to place and the Willis brokers had to look further afield than the London Market, placing £40,000 of the risk, for example, in Germany. The rate was 15 shillings per cent (0.75%), costing White Star Line £7,500 to insure each vessel. Rates now for a comparable risk would be significantly lower. More interesting is the surprisingly high deductible of £150,000 or 15% of insured value. Deductibles on today’s largest cruise ships tend to be considerably under 1% of value. An excerpt from the New York Times in 1912: “Although the sinking of the Titanic involved the largest total loss the marine underwriters have ever had to meet from a single disaster, at the close of the week practically all of the policies written had been met.” Claims for The Titanic totalled £16 million. The Hull claim of £1 million was collected by Willis and settled in full to White Star Line within 30 days of the disaster. It was at the time one of the largest single losses experienced by the Lloyd’s Market and is still one of the most significant losses in maritime history. What claims records tell us is that human error is still the major risk when considering catastrophic Marine losses which, considering the industrial and technological advances made in the last hundred years, is remarkable. Cruise ships keep getting bigger. The latest vessels are up to four times the GT of The Titanic, the biggest values now approach USD 2 billion and, perhaps more significantly, carry up to six times the number of passengers and crew. The consequent increase in exposure to Marine insurers has grown exponentially.”

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