a review of insurance along the supply chain second iberoamerican symposium of marine insurance...

A review of Insurance along the supply chain

Second IberoAmerican Symposium of Marine InsuranceBogota, Colombia Bryan Rettmann, Speaker

Existence of New Niches in Market?

Second IberoAmerican Symposium of Marine InsuranceBogota, Colombia

2

Glo

bal R

each

, Loc

al S

ervi

ce

Product Evolution In The Supply ChainFor ShippersFor Logistics Operators


3

Historical Perspective

“Supply Chain” Discussions Were Fairly Simple How to move goods from point A-B What was the optimal inventory level to assure ample supply

Evolution of “Just in Time” Inventory

Shift to Global Sourcing / ManufacturingCost savingsStrategic: Proximity to customers


4

Changing Role of Logistics Operators

Continued Outsourcing Of Logistics Operations

Logistics Firms Have Expanded RolesOcean /Air / Ground / Rail transportCustoms BrokerageWarehouse / Distribution /Inventory ManagementReturns and recyclingContract manufacturing and packagingTrade FinanceLicensed, standalone insurance agenciesThird Party Claims administrators / Recovery agents


5

Product Evolution - Cargo Owners

Stock Throughput

Combined Property / Cargo

ALOP / DSU – Project Cargo

Supply Chain Interruption


6

Stock Throughput

Stock insurance combines transit (ocean and inland cargo) with "static location" coverage, insuring owned goods in both storage and transit by sea, air, or land most anywhere in the world.

Highlights More inclusive than Cargo Policy

Eliminates gaps in cover in a property policy

Can cover an assureds' goods, materials, finished items in transit to the final point of sale (retail locations)

May Require local Policies on a multinational program


7

Combined Property / Cargo

Combines Cover for real property and Cargo Insurance.

Highlights Combines all the elements of a stock through put policy.

Includes Business Interruption for static risks

Includes Real property Furniture and fixtures

Form can be simplified, streamlined and more easily understood.

No gaps in cover.

One renewal, one form, reduced transaction costs.


8

Designed for construction contractors, energy companies, major manufacturers, or any entity with insurable interest in a major infrastructure project, a Cargo/DSU policy form provides:

Cargo coverage for infrastructure equipment and materials from factory to project site.

Advanced Loss of Profit (ALOP) and Delay in Start up (DSU) coverage, which protects customers against financial loss arising from loss or damage to insured “critical” materials and equipment during transit.

ALOP /DSU Infrastructure Projects


9

Definition of Critical Item:

All equipment, plant and materials which, in the event of total loss during transit, cannot be manufactured, replaced, shipped, installed, tested and commissioned within 3 months, or which cannot be repaired at the destination, or which the unit price in excess of USD2 million and be shipped in breakbulk.

All equipment, plant and materials which, in the event of total loss during transit, cannot be manufactured, replaced, shipped, installed, tested and commissioned within 3 months, or which cannot be repaired at the destination, or which the unit price in excess of USD2 million and be shipped in breakbulk.

MLCE IS KEY


10

Supply Chain Interruption

“All risk” enhanced contingent business interruption coverage

form for supply chain exposures.

Property Insurance generally excludes BI unless there is physical loss or Damage

Supply Chain Interruption requires an upfront assesment of the supply chain and covers virtually all perils for named suppliers.

Political risk,


11

Logistics Operators

Liability CoversFreight Services Liability / Errors & omissions

Enhanced liability contracts (Bespoke)

Port and Terminals Package

Terminal Operators Liability


12

Freight Services LiabilityAn “Integrated” Liability Solution covering …Liliability under contract, international convention, mandatory national law, etc. for

loss of or damage to or the delay in delivery of Customer Goods arising in the ordinary course of providing Insured Services, and

Liability in respect of claims made against you for breach of professional duty arising from an inadvertent error or omission committed in good faith (clerical errors, provision of incorrect advice or information, faulty arrangements and failure to comply with or provide instructions)

Insured Services – When the Insured undertake to transport, store and handle customers goods for reward in the capacity of

Freight forwarder (land, air, sea)Contract carrier (land, air, sea)Road HaulierWarehouse keeperCustoms Brokerage3 PL / 4PL


13

Enhanced liability contracts

Growing Trend of Companies contractually shifting risk of loss or damage to Logistics Providers

Coverage for a logistics company for liability assumed in a customer’s contract above and beyond their normal terms and conditions.

Allows for companies to bid competitively on non-standard contracts


14

Ports & Terminals Packages

Highlights: Combines liabilities, physical damage and business interruption coverages.

Port /Terminal Operators liability

Equipment

Property

Business Interruption


15

Terminal Operators Liability

This form provides liability insurance for damage to cargo while it’s in a terminal operator’s care, custody and control


16

Logistics: Growing Insurance Distribution

Products to sell to Logistics client baseShippers Interest Programs

Licensed as stand alone Insurance Agency

Licensed Claims Third Party administrators and recovery agents


17

How to adapt these product offerings in local Markets?

SCALE

Establishment of forms in local market, and regulatory acceptance

Talent: Understanding of the underwriting discipline and trained staff

Support of Loss Control Expertise

Client Education!

a review of insurance along the supply chain second iberoamerican symposium of marine insurance...

Documents

cargo insurance

property insurance

review of insurance

pl slide

key slide

standalone insurance

cargo coverage

supply chain exposures