PERFORMANCE EVALUATION OF UNDERWRITING IN SHIP FINANCING

Year 2018, Volume: 2 Issue: 1, 43 - 74, 01.03.2018

Erhan Aslanoğlu Tansel Erkmen

Abstract

The subject of this paper is the performance evaluation of the shipping finance underwriting. Insurance included in shipping finance is crucial for the financier to obtain as little credit as possible and we examine how the financing ship is sufficiently protected by the ship finance insurance. The complexity of ratios reports provides a perception of profitability in terms of percentages. This will be suitable for comparing companies and default ratios over time within the shipping business. The result of the model is formulated based on shipping companies in the world. We have analyzed the financial information based on the end result at companies’ fiscal year of all shipping firms since 2011 till at the end of 2016, according to their financial statements. Our approach provides confidence intervals for the default probability of each rating. The probability of default interval can be adjusted by choosing an appropriate level of confidence.

Keywords

Finance insurance, Risk-adjusted value of underwriting, Reserve effects, Underwriting effects, Credit rating, Default

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