BY NANCY DAVIS 



FOR COMMERCIAL FISHERMEN WAS EASY 



TO COME BY IN 1980. 



igh interest rates lured a lot of firms into the 

 business. And, with all the competition, fishermen 

 paid low premiums. In turn, the insurance companies 

 invested that money, earning the high interest rates. 

 Everyone was happy 



But within two years, the outlook reversed. 

 Interest rates fell and the insurance companies 

 began to lose money. At the same time, juries were 

 awarding large liability settlements. 

 The result? 



Many of the insurance companies bailed out, leav- 

 ing a limited marketplace for fishermen to shop 

 around for their insurance. 



Now, insurance rates are sky high, and fishermen 

 are sinking under the burden. Even if a fisherman 

 can find a company that will insure him, he may not be able to cover the costs. 



In the past four years, liability insurance rates for commercial fishermen have 

 increased as much as three or four times, says Glasgow Hicks Jr. , of Hanover Excess 

 and Surplus Inc., an insurance brokerage firm in Wilmington. 



"A fisherman who was paying $5,000 is now paying about $15,000 for a trawler 

 in a matter of a few years," Hicks says. 



Fishermen usually carry two forms of insurance— hull, which insures their boat, 

 and Protection and Indemnity, the marine equivalent of liability insurance. 



The rates fishermen pay are affected by cycles in the insurance industry, the state 

 of the fishing industry and the courts. 



Gary Buchanan, vice president of Associated Insurers, says the insurance 

 industry has economic cycles. As rates of return on investment go up, insurance 

 rates usually go down. 

 Now, the industry is in a low-interest rate, high- insurance premium cycle. 

 There is also a connection between the fishing economy and the insurance losses 

 companies incur, Buchanan says. 



When the fishing industry is in a slump, as it is now, there are more accident 

 claims. Fishermen try to save money; they cut back on personnel and skimp on 

 maintenance. As claims go up, so do insurance rates. 



P&I rates have risen the fastest and are causing the most problems, insurance 

 agents say 



