ABSTRACT

The early examples of insurance are used in the maritime industry. The earliest examples of marine insurance being used as today are started by Edward Lloyd in the coffee house operated in London and Lloyd’s is the first market that comes to mind in the field of marine insurance. The most valuable assets of shipping companies, worth millions of dollars, may face many different risks on every voyage or in ports. For this reason, shipowner companies felt the need to insure their most valuable assets, their ships, against possible damage or loss. The main purpose of this study is to investigate the hull and machinery insurance premiums paid by shipping companies by creating a mathematical risk model. A published source of net damage and premium rates under the current hull and machinery insurance could not be retrieved in Turkey so the values formed as a result of risk modelling could not be compared with other available data. The risk is comprehensively defined in the first section. In other following sections, the correlation between risk and insurance concepts is presented in detail. Then marine insurance is classified, and hull and machinery insurance and reassurance are explained in detail, and also theoretical background on the mathematical model of the study is provided with the model application to the Turkish Merchant Marine Fleet. Finally, the results of this study are shown in the last section.