BPA Inssurance Vote. All members should read.

[bigway 4]

For the people not going out to the dropzones, here is the letter all should read.

12 January 2007
Dear Fellow Members
BPA INSURANCE 2007/8
I am writing ahead of the AGM to update you on BPA insurance for the coming Membership year, 1 April 2007 to 31 March 2008. I should be grateful if you would please call this letter to the attention of your Members and visiting jumpers by posting it on your notice board. The letter is also being posted on the BPA website.
The BPA Insurance Subcommittee, under the able Chairmanship of David Hickling, met on a number of occasions last year including the regular autumn review meeting with the insurers on 25 October 2006. In response to the BPA’s request, following the motion carried at the AGM on
21 January 2006, the insurers have agreed to make provision within the existing BPA insurance policy for experienced European Skydivers with the appropriate FAT licence/s and with at least a specified minimum of skydiving insurance cover, to jump at BPA Affiliated Centres without the need for them additionally to take out BPA insurance. This will be at no additional cost to BPA members. The Insurance Subcommittee has secured this concession from the insurers by providing them with statistics for the calendar year 2006 on the number of experienced EU parachutists who visited the UK to jump.
Further good news is that there has been an underlying downward trend in claims, probably as a result of the proactive risk assessment. Earlier in the year, it has therefore appeared that we were on course for, if not a reduction in insurance premium for next year, a small if any increase.
Unfortunately, the underlying positive trend had been distorted by two potentially large claims that have arisen during the year. Both involve jumpers who have put in claims for significant injuries as a result of parachuting accidents. The insurers are awaiting full particulars of the claims, which will be based on detailed medical prognoses. It has always been the case that such matters take time, and the insurers have advised the BPA that they do not expect to be in a position to attach a reserve figure to each claim until February 2007. Because each reserve is likely to be a significant figure, the overall amount of the reserves for each of these new claims will determine whether the underwriters would be prepared to offer renewal of the BPA’s insurance cover for a further year and, if so, at what premium any renewal would be.
This means that, unfortunately, the insurers are not in a position to provide a quotation for next year’s insurance, and were are not expecting them to be able to do so in time the AGM on Saturday 20 January 2007.
The Insurance Subcommittee has, during 2006, continued to scour the market to try to identify other possible insurers. At least seven possible underwriters have been approached, of whom six have declined and the seventh has still not yet given a final response. It is now over a month after the deadline of the EGM on 5 December 2006, and their overdue reply does nothing to raise our hopes.
At the AGM, the Council will therefore not be asking the Membership, as usual, to approve a particular amount per Member for the insurance premium for next year, because we simply do not yet know the figure. Rather, we shall be asking the Membership to trust its elected Council to negotiate on its with the insurers to achieve the best value insurance for the Membership. The insurers will be present at the Hinckley Island Hotel for an insurance seminar at 1400 on the afternoon of AGM Day to answer any questions that you or the Members of your Club or Centre may have.
Please can Clubs & Centres kindly do everything to help to spread the word about the insurance position as set out in this letter. Please encourage jumpers to understand how important it is that the BPA Council should be entrusted with the task of securing BPA insurance for the new Membership year beginning on 1 April 2007.
May I take this opportunity to wish you and all Members of your Club or Centre all good wishes for 2007, and I look forward to seeing you at the AGM.
Yours sincerely
KieranTBrady
Development Chairman

.Karnage Krew Gear Store
.

[pincheck 0]

Already read it would be interested in how other national organisations go about arranging their insurance.

Billy-Sonic Haggis Flickr-Fun

[skytash 0]

Could someone who is a member of the German association please correct me if I'm wrong (I'll ask in the German forum for someone to read this and let us know), I think in Germany parachutists are classified as pilots. They need to sit an exam on the laws of flying (Flugrecht). As such, skydivers can seek their own insurance in their capacity as pilots and there are a fair number of insurers out there.

I know that when I've jumped at German DZ's I've been asked to provide proof of insurance cover, which the BPA kindly faxed to me.

Is this a way that we could go? It may also be that other countries' equivalent of the CAA don't require the same level of insurance cover?

tash

Don't ever save anything for a special occasion. Being alive is a special occasion. Avril Sloe

[BKR 0]

Do you think it might be a good idea to have all the EEC Skydiving Feredations or groups to merge together in the research of one insurer for our activities. By such way the impact of the skydivers number will be bigger to get a good one and a cheaper one instead of trying in our own.

Jérôme Bunker
Basik Air Concept
www.basik.fr
http://www.facebook.com/pages/Le-Luc-France/BASIK-AIR-CONCEPT/172133350468

[bigway 4]

I think that would be excellent. Surely we would not to pay as much.... I forget, how much is it?

.Karnage Krew Gear Store
.

[gus 1]

I'm not interested in names or anything sensitive but does anyone know the circumstances around the 2 large claims referenced in that letter?

Gus

OutpatientsOnline.com

[skytash 0]

I asked the question in the German forum and got one answer so far - everyone gets their own insurance in Germany. From an insurance perspective that is better as there is the chance that one insurer isn't on both sides of the same claim, therefore not having to pay two lots of legal fees.

However I don't' think that it would possible to do that in the UK, as the market isn't big enough to make it worthwhile even working out the risks and premiums. I asked one of our actuaries once about life insurance cover and that was his response. With a maximum of 6,000 customers, he can spend his time on more worthwhile product development .

edited to add the main gist I meant to post, which is that if there was only one insurer for the whole of Europe, they would suffer the same losses as the UK insurer currently does. What we need to do is encourage those who insure in other European markets (ie like the Germans) to cover people permanently living and jumping in a differnt market, ideally also with non-German licences. That could only be achieved if all the associations got together and started talking to those insurance companies who already use the system as in Germany.

tash

Don't ever save anything for a special occasion. Being alive is a special occasion. Avril Sloe

[pincheck 0]

I would like to know as well but would like to know how other country organisations work their insurance is it possible to Join say the Uspa and still jump in the UK or is it Like a Closed shop say a dz decided stuff this and dumped the BPA going over to another organization how would that happen. Since we are in the EEC If we have to Join the Bpa does this not contravene our freedoms under the EEC human rights convetnion or is it the CAA who are responsable.

Billy-Sonic Haggis Flickr-Fun

[skytash 0]

The USPA wouldn't be included in a pan-European deal which would be needed under the common market freedom of movements rules. If you re-read the OP, if you have cover and membership from a foreign country and are visiting the UK, that is now acceptable. The question is whether you can join another European association without living in that country and can you buy insurance in say Germany without an address there - that goes back to negotiating with the insurance companies around Europe.

tash

Don't ever save anything for a special occasion. Being alive is a special occasion. Avril Sloe

[gremlin 0]

I am insured with the DFV - the german equivalent of the BPA. You just call them up and get insurance. the key difference I beleive is that the DFV picks between different companies depending on whether you are an instructor etc. As a member all I know is that it was extremely straightforward and the insurance certificate is even in English (and german obviously)

You do have to do an exam and German law treats you as a pilot but I don't think that we could replicate that in UK.

Oh and I have just re-newed for 2007 and it cost me £86 including membership and insurance, bit cheaper than BPA!

If anyone wants to know more please PM me.

ADAM

I'm drunk, you're drunk, lets go back to mine....

[skytash 0]

Adam, could you let us know how much the DFV cover is for so we can compare it to the UK cover?

And you also made the point that there are a number of companies to choose from, a luxury we don't seem to have anymore in the UK.

tash

Don't ever save anything for a special occasion. Being alive is a special occasion. Avril Sloe

[cpoxon 0]

I'm glad the BPA have taken the step to make the membership aware of this. I'd heard, as I'm sure many of the membership have, that this was on the cards, since it came up at an open meeting (although the way the minutes are approved, that haven't yet appeared on the website). I'm sure the membership at large would be have been quite upset if this had been sprung on them at the AGM.

I'm also glad to see that people are not taking this opportunity to bash the BPA (and I hope the will continue to do so).

Can somebody clarify the concept of reserves for me? Basically they are the pots of money put aside to cover any claims? If so, how big are they and are they capped in any way?

I'm trying to work out what the worst case scenario is here. I would imagine the absolute worse case is that the current insurance company do not quote for the next year and the Association are unable to find alternative insurance. Without insurance, we are unable to skydive.

The second worse case is that the claims are as big as they can be with the insurers still prepared to give us a renewal quotation, and are paid out. In this scenario, are the current insurers able to at least give a rough estimate as to how much it would cost? If it is something ridiculous like several hundred pounds, this will drive away a large proportion of the membership leaving those who are able to pay shouldering an even bigger share of the cost.

Whilst I don't see an alternative, and would wish to trust the Council and Staff to achieve the best value for the membership, voting for a blank cheque doesn't seem right to me.

Skydiving Fatalities - Cease not to learn 'til thou cease to live

[gremlin 0]

The DFV coverage if for E1.5 million - this equates to approx £1 million. This is worldwide coverage. To compare the BPA offers £2million in the UK, £100,000 in the rest of the world and specifically excludes the USA.

I have been told that the E1.5million is a European minimum and that therefore the BPA's £0.1 million is illegal in Europe. I can't comment on this though.

The DFV also offered to up their insurance coverage, at no extra cost, to allow their members to jump at BPA DZs, but the committee rejected this.

I'm drunk, you're drunk, lets go back to mine....

[bigway 4]

voting for a blank cheque doesn't seem right to me.




Cheeky just to be asked to do that.

I hope none of your scenarios happen, this would be the end of a few dropzones if that was the case.

.Karnage Krew Gear Store
.

[dragon2 0]

What exactly are you insuring? In The Netherlands, we are required to have medical insurance, and the KNVvL's insurance only pays out damages done to others when your own insurance company will not pay so it's a secundary insurance. Our insurance is good for € 901.713 (??) but € 1.500.000 in Germany, per case. You have to pay € 113 yourself per case. Insurance is good in most of europe plus USA, Australia, Canada.

ciel bleu,
Saskia

[gremlin 0]

The BPA insurance is 3rd party insurance - you do not have to pay anything if there is a claim. There is no medical coverage. How much is the insurance in the Netherlands?

I'm drunk, you're drunk, lets go back to mine....

[dragon2 0]

Quote

The BPA insurance is 3rd party insurance - you do not have to pay anything if there is a claim. There is no medical coverage. How much is the insurance in the Netherlands?

No clue how much for just the insurance. We pay EUR 110 or thereabouts (haven't had the bill yet for 2007) for membership KNVvL, FAI license and insurance.

ciel bleu,
Saskia

[dragon2 0]

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There is no medical coverage.

Then what are the 2 claims about?

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Unfortunately, the underlying positive trend had been distorted by two potentially large claims that have arisen during the year. Both involve jumpers who have put in claims for significant injuries as a result of parachuting accidents. The insurers are awaiting full particulars of the claims, which will be based on detailed medical prognoses.

Are those injuries DONE to them by other jumpers??

ciel bleu,
Saskia

[gremlin 0]

The insurance is 3rd party liability - if a parachutist hits a car the car owner can claim but the parachutist cannot claim. Unfortunately if 2 parachutists collide they could claim off each others insurance or if a parachutist has his own insurance that insurance company may try to claim off the BPA insurance. These types of claim are rare but tend to be expensive.

I do not know the details of the 2 cases in the letter.

I'm drunk, you're drunk, lets go back to mine....

[skydog 2]

Quote

I'm not interested in names or anything sensitive but does anyone know the circumstances around the 2 large claims referenced in that letter?

Gus

One is member on member swooping accident claim and the other is the injury to a static line student at Netheravon, which left her paralysed.

Bryn

Journey not destination.....

[cpoxon 0]

Quote

Quote

I'm not interested in names or anything sensitive but does anyone know the circumstances around the 2 large claims referenced in that letter?

Gus

One is member on member swooping accident claim and the other is the injury to a static line student at Netheravon, which left her paralysed.

Bryn

I think you are correct about the static line student, but if we are thinking about the same member on member swooping accident, that happened several years ago whereas Keiran's letter refers to "new" claims, so I don't think it's that one?

Skydiving Fatalities - Cease not to learn 'til thou cease to live

[skytash 0]

weren't you on council at one point which would give you an insight on what reserves are for? Looking at the accounts as published with the mag etc there is no explanation of the purpose of the reserves. Under company law there is no need for them and as the company is limited by guarantee there is no dividend payout (which is what companies limited by shareholders funds use their reserves for).

I'll try and catch up with Debbie at the AGM and find out what the rules are for use of the reserves and try to explain it in laymans terms. Many companies limited by guarantee have terms in their articles of association (effectively the consitution) which fix what the reserves can be used for, although most of the other companies I've dealt with limited by guarantee are charities, and their reserves are often donations with clauses attached to them (eg only the investment income can be used for the charity's activities).

My understanding (which I'll check with Debbie) of the use of the reserves is to continue the company's activities, which are 'the promotion and encouragement of sport parachuting and maintenance of safety standards'. I think the idea was that they can be called upon if we stop getting grants from UK Sport. We may stop getting grants as skydiving isn't an olympic sport and it seems like they are running out of money for the London Olympics so they may stop supporting non-olympic sports until after 2012.

In terms of using the money to pay claims, I doubt that is possible. I believe (again, not sure DH will know more about this from the insurance committee) that the CAA requires every skydiver to be insured for possible damage caused to 3rd parties or their property during skydiving. In a simple case, this is me hitting a car in the car park and will pay for the damage to the car. In a complex case, this is a canopy collision which causes both parties to not be able to carry on their normal job and claiming compensation for loss of earnings from the other. Now, as person 1 is unlikely to be in a position to cover the loss of earnings of person 2 in that event, the insurance policy pays out. BUT first you need to determine who was at fault, as only the one at fault pays the other. The one at fault doesn't get anything. As we all know, working out who was at fault of a canopy collision is quite difficult, and experts need to be paid for as well as the lawyers representing the two people involved.

The way insurance in principle works, is that lots of people pay their £100 per year car insurance, say, but few of us claim. The insurance company collects say £100 from 10 people and therefore has £1,000 to pay for the claim that one of them makes per year(let's ignore the salaries they pay people like me who work for them!).

If the costs of a single complex case start reaching £100,000 (which with to sets of lawyers, two sets of medical experts, two sets of skydiving experts can soon happen) then the insurance company needs to collect enough premiums from everyone else to make up the £100,000 they need to pay out.

To work out how much the premium needs to be, the insurance company needs to make an estimate of what the costs could be. 10 years ago, that was quite simple. There weren't many of the complex cases around, they were all 'hitting a car' type things, which would possibly come to say £3,000 per year (it was presented at the AGM a couple of years ago). Now that skydivers are sueing each other estimating the costs is a bit harder. Insurance companies use past claims data and other relevant data to work out what the chances are of having to make a payout and how much it is likely to be - that's what the actuaries do and why they are all maths and statistics experts. The data in the UK has been bad over the last few years, and any actuary in their right mind will have to assume that the most recent data is more valid than the old data. It is therefore likely that they will assume there could be x number of skydiver vs skydiver claims per year, each costing £y thousands, so they need to get more money to cover the cost of that payout. Any new insurer would take one look at the numbers and decline to even work out how much they need to collect. Also, most actuaries use similar approaches to working this out, so a second insurance company is likely to quote a similar amount to the current one as there is no real motivation to get the custom of people who will end up bleeding you dry with claims.

In my view there are two things which could reduce the cost of our insurance:
1 - no two policyholders can claim against each other (which I don't think is legally possible, there are certain things around excluding personal injury liability from any contract wich is why waivers don't work in the UK)
2 - increase the population of people who are covered, so that the £100,000 cost of claim is split between more people. I doubt we will ever get significantly more skydivers in the UK to make enough of a difference. The German model appeals to me, as the insurance companies insure the skydivers and other pilots, probably including hanggliders, paragliders and PPL holders - so there are far more people covered, and there is a chance that enough money can be made in year 1 to cover salaries, even if not in year 2, but then again it could be in year 3 etc. Also, because there is a large population of people, and everyone has the option to buy their own insurance, there is a competitive market there. As the BPA does insurance for all of us in one lot, there is only one customer to compete for and as said above, why would anyone compete for our business?

As much as everyone thinks that insurance companies have deep pockets, they don't really as most of the money they have is set aside to pay for the anticipated claims from the policyholders.

tash

edited for spelling

Don't ever save anything for a special occasion. Being alive is a special occasion. Avril Sloe

[skytash 0]

on another note, I know that in Germany (and it sounds like it on the Netherlands too) it is common for people to have 3rd party liability insurance as an everyday thing, referred to as Haftplichtversicherung in Germany.

That doesn't exist in the UK. The only thing that people have 3rd party insurance for (and sometimes more) is their cars here. So the the BPA insurance is the primary insurance as people don't have their own insurance like you seem to have in the Netherlands.

tash

Don't ever save anything for a special occasion. Being alive is a special occasion. Avril Sloe

[cpoxon 0]

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weren't you on council at one point which would give you an insight on what reserves are for?

Yes, and Development no less, but I'm afraid my memory is vague will see if I have any old paperwork tomorrow.

One thing I will say is that I think the BPA's reserve is different (i.e. separate) from the insurer's reserves. I think the confusion comes from the idea that has been mentioned in the past that the BPA could use its reserve (~£1M?) to insure ourselves if we can no longer secure insurance. And with regards to the insurers reserves, I just found this quote from the
Chairman's speech last year

Quote

The BPA insurers had advised that the finances of the BPA insurance policy were balancing on a knife edge of contributions on one side and paid claims on the other. The insurance account was currently in deficit - it had a mountain to climb, but progress to date was satisfactory - as evidenced by the lack of any increase in the insurance premium this year (see minute 3). But if we did not continue to climb this mountain, we would all pay

Skydiving Fatalities - Cease not to learn 'til thou cease to live

[skydog 2]

Quote

I think you are correct about the static line student, but if we are thinking about the same member on member swooping accident, that happened several years ago whereas Keiran's letter refers to "new" claims, so I don't think it's that one?

You could be right, but I know the first hasn't been settled so the term "new" could be misleading.....

Bryn

Journey not destination.....