Soundings Trade Only Magazine

STAGE IS SET FOR JULY 17-20 MAATS p. 28

®

INSIDE: As the domestic market flounders and the dollar declines, American boatbuilders are shipping more product abroad. Despite the increase in overseas sales, however, the U.S. marine industry still is running a trade deficit.

p. 32

THE BOATING BUSINESS NEWSPAPER VOL. XLV, NO. ¹ JULY 2007

$5.00

www.tradeonlytoday.com

Jacobs enters Wal-Mart/Roehm fray

Irwin Jacobs

By JoAnn W. Goddard / Associate Editor j.goddard@tradeonlytoday.com

Genmar chairman Irwin Jacobs has been drawn into a notorious court battle between Wal-Mart and a disgruntled senior executive, and he has fired back with a suit of his own.

Julie Roehm, who was fired by Wal-Mart last year, alleges that CEO Lee

Scott accepted gifts from suppliers and forged business relationships that involve conflicts of interest.

She specifically names Scott’s relationship with entrepreneur Jacobs, who also owns Jacobs Trading Co., which purchases unsold merchandise from Wal-Mart. She contends Scott, through his relationship with Jacobs, received

preferential prices on a pink diamond and several yachts.

Jacobs vehemently denies Roehm’s claims, and is suing Roehm and her attorneys for defamation.

It is the latest development in a mudslinging legal brouhaha between Roehm and the giant retailer.

continued on Page 55

Julie Roehm

BOAT INSURANCE COMPARISONS
Stability edging back

on the insurance front

Annual premiums for a 2004, 50' cruiser with
Twin 640 Diesels, Radar, Genset, etc; Value: $515,000.
Standard assumptions: Regional lay-ups, good experience, etc.

GREAT LAKES:

2004 ...................... $2,487

2006 ...................... $2,538

2007 ...................... $2,252

NORTHEAST ATLANTIC/
EAST COAST:
2004 ...................... $3,493
2006 ...................... $3,554
2007 ...................... $3,935

GULF:

Availability limited, Ex-wind optional (below includes wind)

2004 ...................... $4,301

2006 ...................... $7,041

2007 ...................... $7,706

WEST COAST/CALIFORNIA:

2004 ...................... $4,230

2006 ...................... $4,307

2007 . . . . . . . . . . . . . . . . . . . . . . $3,920

FLORIDA: (South Florida is in a class of its own.
Limited availability, excluding wind coverage,
Lloyds of London is an underwriter for this particular area.)

2004 ..............................Ex-wind$3,868 ................................... W/wind $5,133

2006 ..............................Ex-wind$6,552 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . W/wind not available 2007 ..............................Ex-wind$4,641 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . W/wind not available Source: Global Marine Insurance

Mild ’06 hurricane season and a soft market

have policy writers again vying for business

By Greg Proteau

Many forces in nature have the ability to devastate shoreline structures and near shore landscapes. But there’s nothing like a Force 4 or 5 hurricane tearing through high-density boating areas to wreck recreational vessels and the industry that serves them.

When it comes to marine insurance, major storms and other disasters also force underwriters to cover their losses by pushing up premiums, or worse, retreating from the market entirely — sometimes for years — leaving boat owners and businesses insurance-poor or simply bare. For those who may have been considering buying a boat, it puts those plans on indefinite hold. And for lenders unable to insure the collateral on boat loans, they deploy funds elsewhere.

That scenario developed after the triple-whammy of Hurricanes Katrina, Wilma and Rita of 2005. Several major underwriters opted to write no new business, pulled out of Florida and other Gulf markets, dramatically raised premi-

n The 2007 hurricane season began June 1, and forecasters expect it to be a busy one. p. 10

ums, boosted deductibles, added exclusions or did a combination of all. On the commercial side, marina rates went through the roof with operators absorbing the costs and sacrificing profits or just saying “no” and taking the chance that calamity would pass them by.

After the benign 2006 hurricane season, underwriters are testing the Southeast waters once again. They’ve had a year without significant losses, a chance to build up reserves being fed by premium increases, and a desire to get back into the premier market for their products. After all, if they don’t get back in now, somebody else will grab their customers. In the nonstorm markets, firms aren’t writing as many new policies because of slow boat sales, and they may be trying to buy share there with lower premiums.