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Bonn, Germany-German marine insurer Darag A.G. and German commercial insurance group Gerling A.G. have joined to offer shipowners liability coverage at fixed rates and limited coverage of up to $100 million, competing for the main business of P&I clubs.
Darag A.G. Senior Executive Ralf Oertel said fixed rates appeal to owners of container vessels and general cargo, who dislike paying mutuals for the pooled risks. "Many owners don't need unlimited cover and prefer rates that reflect their own risk," said Mr. Oertel.
Darag began 40 years ago insuring shipowners in former East Germany and expanded nationally with limited coverage and fixed premiums in 1990.
Currently, 250 ships are insured with the Berlin-based Darag P&I. Darag now has teamed up with Cologne, Germany-based commercial insurer Gerling A.G. to extend its international reach.
"At present, Darag focuses on the German market," said Gerling Market Management Director Dirk Lindemann. "The cooperation with Gerling gives it a worldwide network and greater product reach."
Cooperation also increases Darag's limit of coverage from 30 million deutsche marks ($17.6 million) to $100 million, focusing Darag's objective directly at the main business of P&I clubs.
"More owners with larger tonnage are looking to buy P&I cover in Germany," said Mr. Lindemann. "Our initial interest is Europe, but other markets could follow."
Gerling and Darag are coinsurers in the venture; however, Darag will manage the business. Last year, Darag's gross premiums written rose to 146 million deutsche marks ($94.6 million) from 138 million deutsche marks ($96.1 million) in 1995. However, due to a fluctuation in exchange rates, gross premiums written declined in U.S. dollars. Net income totaled 69 million deutsche marks ($44.7 million), up from 63 million deutsche marks ($43.9 million).