Ocean Cargo Insurance / Underwriting


#1

Hello Fellow Sailors

As many of you now or in the past, I too have transitioned from seagoing to shoreside. I am entering the wonderful (not) world of insurance for the marine sector, focusing on ocean cargo. Having sailed nearly 5 years, i guess this was the next best stepping stone to find a place closer to family.

Anyways, for those of you who too have left seagoing for shoreside and find yourself in the ocean marine/cargo/underwriting arena, id like to pick your brain.

As I am quickly finding, ocean cargo insurance too is just as unregulated and outdated as many laws pertaining to us at sea. Seeing how underwriters “write the business” or how companies “plan” for the cargo voyage, they dont have a solid picture of actual operations. However, they get by with metrics that have been used for centuries.

I WANT TO CHANGE THAT.

Seeing how underwriters conduct their business, they essentially ask varied questions about the cargo and what exposures (weather, transport modes, value, ways it was packed, etc) and determine a fair market value to insure the goods should a loss occur. Well, seems pretty simple enough, however it seems a bit too complicated.

For those out there that are in this arena, I’d appreciate you sharing your thoughts on how you see/simplify/conduct your business/found areas of improvement/etc,. This needs to change and I have my gCaptain family to ask for guidance.

Carry on!


#2

I worked in Ocean Marine cargo insurance for a number of years from just about every angle at the table; Shipping Line, Insurer, Supplier/Cargo Owner and Customer and my distinct impression on the field is that there are 4 rules that govern:

1). B/L Language and Terms are set in stone, inherently favor the vessel operator above all other parties and in most cases date back to times where cargo or vessel restraint by Kings and Princes were a real concern. That is of course, unless you/your company are in the position to dictate terms to those who beg you to either carry their freight or fill their ships with your cargo. It’s impressive to see what can be superseded or held invalid when the price is right.

2). Regardless of 1, you can’t escape the governing clauses. Hague-Visby and COGSA own you, unless you are doing fly-by-night business in some 4th world port with a 5th world carrier.

3). Aside from the old-timers and the occasional professional mariner coming ashore, the only really experience people I found in the field were 3rd parties (surveyors etc) not affiliated with “the office”. These parties have the expertise and could be hired to provide it, so there is often no need to put people with real-world experience into any position of authority in the office. The inevitable result is an environment where tailoring coverage and executing appropriate risk assessments is left to people with a shallow understanding of the nature of the business they are in. This applies to both sides of the coin.

4). An uneducated customer is the best customer. Keeping the rules and regulations verbose and voluminous only serves to discourage your Johnny Everyman from attempting to do business with Lines by himself, which is where NVOCC’s and other intermediaries come in. These parties tend to have the coziest and best-insulated relationships with the Lines, so when something inevitably goes wrong the small-time shipper usually ends up with a meager payout.

The system has been clouded and complicated for a reason, trying to undo that will run you afoul of some folks with very deep pockets and Admiralty lawyers a plenty on retainer.