When it comes to blatant examples of displaying super
wealth, cars and even mansions are left in the shade by the trend for the world’s
richest to splash out on a luxury sea vessel. So called 'super yachts' are now firmly established as
the favourite plaything for those for whom money really is no object, according
to Lloyd’s news and insight
section demand for the extravagantly
designed ships is getting bigger, as indeed are the vessels themselves.
Whether or not it is the appeal of high levels of
privacy or the ability to spend time anywhere in the world with a relatively
good amount of discretion as to actual movements, the fact that the yachts
themselves are some of the most publicity attracting forms of transport in the
world can cancel out any other advantages of anonymity.
Mark Feltham, executive director of insurance broker
Willis Marine and Super Yachts commented: “Super yachts are now much bigger and
more sophisticated than ever before –today a yacht would need to be 80 metres
or more to get into the top 100."
Most of this class of vessel are built to order by
special commission, meaning that customisation is included at all levels and
ultra-high-net-worth owners can create a waterborne environment to their exact
specifications.
Boys-toys additions don't just mean high end sound
systems or cinemas. The current hot trends are onboard helicopters and
submarines. Of course, this is where insurers such as Feltham's firm enter the
picture.
“This demands specialist underwriting and broking to
understand the unique operation and service levels required by these incredible
craft. In our experience, the Lloyd’s and the London company markets show a
deeper understanding of what’s expected both in terms of coverage levels and top-notch
claims service,” explained Feltham.
Value
Of course this isn't entirely a new development as the
super-rich have long favoured large yachts as both a getaway and a symbol of
status. The Rising Sun cost $200 Million and was originally owned by Larry
Ellison the CEO of computer firm Oracle. Now owned by music and film mogul
David Geffen the 'floating mansion' boasts a basketball court that doubles as a
helicopter pad and has five floors with a total of 82 rooms.
USA film giant Steven Spielberg has a $200 Million
vessel called Seven Seas which was constructed by the Dutch shipyard Oceano.
His own specifications meant inclusions for an infinity pool with a 15 foot
glass surface that can be also be used to screen films.
These are examples of bigger vessels and certainly not
the most expensive either, but a more run of the mill super yacht will cost
around 20 to 40 million Euros according to Paul Miller, an underwriter at
R&Q Marine.
Location
A movable asset such as a super yacht can literally go
anywhere in the world, but for many years the traditional places were moorings
in the south of France or voyages around the Mediterranean or Caribbean.
However, a new generation of owners are looking further
afield and not only to Asia and the Pacific. James May, Deputy Marine Hull
Underwriter, commented on the increasing number of owners who are taking their
yachts to the Antarctic Peninsula.
“Not only does this present increased environmental
hazards for the yacht, but there are other factors for the insurer to consider
such as lack of emergency assistance or repair facilities in the area,” he
said.
Risks
With the high values involved, risk assessments can be
a difficult process as claims in the super-yacht insurance market are
relatively low. Advanced cutting edge onboard technology and top quality crews
make super yachts a relatively good risk. “Standards for super yachts are
phenomenally high, whether it is the quality of professional crew, levels of
maintenance or regulation. They hire the best crew and there is no question of
cutting corners.” said Willis Marine and Super Yachts' Feltham.
The biggest risk to a super yacht is fire as even the
smallest incident can cause serious damage. Faulty wiring causes most fires
whilst most explosions which cause subsequent fires result from fuelling
problems.
Grounding is a risk for any water based vessel and can
cause a total loss. Collisions can also happen through manual error or
equipment failure but encounters with docks, pilings, and other stationary
objects are less dangerous than when two ships collide.
The most serious risks really are beyond control
though, as the weather means it is hard to avoid damage even when fully docked
in harbour. The major hurricanes to hit the US between 2008 and 2012, Ike,
Irene, and Sandy, caused significant damage to shipping of all classes,
including high end vessels.
Cruise
liners
Of course there is one class of sea vessel that is even
more expensive than a super yacht, and strangely it is also one that most of us
could choose to have access to.
Cruise ships come in all sizes, but the biggest ocean
liners are vastly more impressive than the most costly yacht. Allure of the
Seas is the most expensive cruise ship currently in operation. It is the latest
cruise ship in the Oasis class, owned by Royal Caribbean International and cost
around $1.4 billion to build. It is the largest passenger ship ever constructed
and accommodates 6,296 guests as well as 2,384 crew members.
Of course disasters happen to massive vessels too, with
the sinking of the Titanic in April 1912 still resonating in popular culture.
More recently the grounding of the luxury cruise liner the Costa Concordia off
the coast of Tuscany brought matters home, causing fatalities, injuries and the
evacuation of 4,200 people.
