As the high-performance marine industry faces new challenges, many companies will be putting their best foot forward to continue to advance the sport over the coming years. There are a lot of questions surrounding our market, so we thought now was as good a time as ever to sit down with nine of the most knowledgeable and respected people in the business to get their thoughts on the immediate future and the most pressing issues facing this industry.
Each weekday from Jan. 9 through Jan. 19, we’ll bring you another panel member’s answers from this nine-part Industry Focus Group feature. Not quite ready to dive into the New Year? Check out our list of the biggest stories of 2011.
Vice President, Total Dollar Yacht Insurance
Do you expect to see many changes in the world of high-performance boat insurance?
I believe what you will begin to see in the near future is a consolidation of the market in terms of products. Every few years, a few new insurance companies seem to enter the market, which can be both good and bad. It is good in the short term for the consumer as competition keeps rates down. It can be bad as this new player may enter the market, drive rates down and then depart just as quickly as they entered. This could result in a more established insurance company leaving the performance segment due to a decrease in market share, as they won’t compete against the new carrier who has no experience. This in essence could leave the market in a lurch if all the carriers leave and you end up with no competition, which could result in large rate increases.
Total Dollar has been running its own proprietary insurance programs since 2001 and has been active in the performance segment since the early ’90s. We have seen the rate fluctuations from the extreme highs of the ’90s to extremely low a few years ago. They have come up a little in the last few years, but still sit historically under the average of the last 10 years. More importantly, we continue to put more of our focus on improving the policy and warranting certain things that we feel are of importance in safety and keeping claims down.
What do you think needs to be addressed in regard to safety concerns when it comes to both pleasure and race boats?
Going back to the previous question, one of the warranties we have in our policy is the requirement of using a lanyard or ignition interruption switch. When you have one claim that could have been avoided for an operator falling off of his boat and that vessel proceeding to run someone over, you really don’t have to think very hard about making this a requirement. There have been other similar scenarios of people being ejected or falling from their boat — thankfully no one being injured — but the boat ends up being totaled because it is now in the trees.
Beyond that, safety is always going to be a concern as the power gets bigger and the boats get lighter. We continue to adhere to our guidelines to underwrite the operator or owner of the boat more than necessarily the boat itself. We like to see people making a realistic transition in both size and speed as they continue to enjoy the sport of performance boating. There is sometimes nothing more frustrating than watching someone who has no experience going out and purchasing a boat they don’t know how to handle. As an avid boater myself, it is not really a comfortable feeling knowing that there are people out on the water who really have no business being out there.
The issue for these inexperienced boaters is an industry problem, not just one for the performance side. There are very few places that someone can go and learn the skills they need to jump into a boat whether it goes 10 knots or 150 knots. Thankfully in the performance segment, Tres Martin realized this and went out and put together a school with great results. We would love to see additional professionals like Tres develop similar courses so that even more people can take advantage of these schools. Even avid boaters who have taken Tres Martin’s course have come back and advised that they felt it was well worth the time and cost.
Do you envision a trend toward smaller boats?
With the questions surrounding our economy and where it is going, this is not an easy question to answer. The majority of new boats we have seen are actually on the other extreme, as most are high-powered large catamarans. We’ve also seen a lot of people move to the performance center console with outboards. The price of fuel and engine maintenance coupled with the poor economy has made this a very common call for performance boaters to make this switch. My hope for our market is that our overall economy can stabilize so people will feel better about going out and doing what they enjoy and we can start growing as an industry again.
Editor’s Note: Next up, Reggie Fountain, Fountain Performance Boats
Click here to read Part IV with Scott Shogren, Shogren Performance Marine