During the last Défi Azimut, two boats, Fabrice Amedeo’s Newrest-Art & Fenêtres and Louis Burton’s Bureau Vallée were unable to start racing because of a problem with the renewal of their insurance. And so, in light of that, Tip & Shaft took an interest and questioned most of the teams to learn how the Vendée Globe Imocas are insured.
The 33 sailors who will start the ninth Vendée Globe on November 8 are all required to have civil liability insurance covering any damage caused to third parties (NoR rule 19 ‘to a value of over €3m’), but they are not obliged to insure their boat. Tip & Shaft could not reach all 33 teams but out of the 26 who responded, only three did not use an insurer for their boat: L’Occitane (Armel Tripon), PRB (Kevin Escoffier) and Campagne de France (Miranda Merron).
The reasons are all related to the costs of insurance premiums and high excess costs. “It costs too much and the boat is now ten years old, so it is already amortised (written off as an asset)”, we were told by PRB. Halvard Mabire, team manager of Campagne de France, explains: “The solutions we are offered just were not acceptable: we have a boat of which the insured value is 400,000 euros and it costs us 50,000 euros in premiums with an excess of 150,000 euros which is calculated on the total loss of the boat which did not exist before.”
For Michel de Franssu, team manager of L’Occitane, one of the eight new Imoca of the 2020 Vendée Globe, the question is not yet completely settled: “We are waiting for a new proposal which, from what I understand , could be revised downwards if we equip the boat with Oscar [the detection system for warning of unidentified floating objects, see our article]”. But the feeling is not to insure the 60 footer of Armel Tripon, even if its value is estimated at more than 5 million euros.
“Right now the insurance premium is equivalent to 10% of the value of the boat and then the excess is around 500,000 euros and for that it is knowing that the cost is based on total loss of the boat only, not the cost of the sails, the mast, appendages, electronics… It is only in the event of a total loss that it is worthwhile to be insured.” Suggests Michel de Franssu. “However, when we look at the statistics of total loss on the last editions of the Vendée Globe, the probability is still quite low. So in the end, the cover offered is poor compared to the cost. ”
And on top of that this amount changes from one year to the next, making budgeting projections complicated: “When you start a four-year cycle, you don’t know in advance what you are going to be asked for for in the Vendée Globe year, you always have an element of uncertainty in predicting the costs of the premiums and the excesses”, confirms Louis Burton. Excesses (the initial amount borne by the insured party) vary mainly between 150,000 to 500,000 euros.
“Considering the excess costs then you ultimately only insure the total loss. So, for example on a dismasting you are below the excess level on a new boat”, notes Greg Evrard who is team manager of Corum L’Epargne (Nicolas Troussel) .
Not many know better than Stéphane Le Diraison who was victim of a dismasting on the last Vendée Globe 2016, “I paid a lot (in terms of premiums) to have nothing (back). What is very embarrassing is that from an objective, philosophical point of view is that if I had called for help and left the boat – knowing that my life was potentially in danger because my mast was down on the deck and cutting into the hull and with a force 9 wind pushing me towards Antarctica – I would have been reimbursed 100% for what would then have been a total loss. But, doing everything to bring the boat back to port, perhaps even risking my life, I fell into the ‘box’ where I was not actually entitled to anything. ”
And of course insurers are in reality quite cautious to enter this niche market, one which is deemed risky, especially when capsizes make the headlines of the television news. “The real blow was the disaster that befell (the Ultime) Banque Populaire on the Route du Rhum 2018. We are all paying for that”, says one skipper sharing a feeling held by others, but not by Antoine Mermod, president of the Imoca class: “This is nothing compared to the hurricane in Saint-Barth which destroyed 150 boats worth several million euros all covered by the same insurer. We have to think more about the whole sailing boat ecosystem in total.”
Lars Troeppner adds: “The insurers do not only look at the loss ratios of the individual sailing classes, but also on the whole water sports sector and in this sector the total loss figures are not so positive for the insurer since years. In recent years, there has been an increase in major losses, due to hall fires, storm damage in marinas, hurricane damage in the USA and the Caribbean, etc.
And Halvard Mabire agrees: “We took technological risks and as (things happened) insurance paid out and we continued. Today, we are paying a bit for this, and we are in a field of prototypes, where it is necessary to know how to measure and how to take on the risks. ” That makes one individual in the insurance world sum up: “My feeling is that these boats should not be insured. They are racing boats, and the principle of competition is to always go for the limit. ”
Photo: Anne Beaugé / Défi Azimut