The ocean cargo market has always been linked closely with the global supply chain. As the world evolves and becomes ever more interconnected, the supply chain and its insurance needs change in tandem.
Ocean marine insurance is a competitive business with significant market capacity in many regions of the world. Success in global ocean marine underwriting, risk engineering, claims management and broking requires agility, creativity and expertise, according to Aspen Insurance’s executive vice president and head of US Marine, Pat Hickey (pictured).
“A cargo underwriter cannot deliver a customized global insurance solution to their customers without a comprehensive understanding of the global sourcing of raw materials, manufacturing process and staging of finished goods for final distribution,” Hickey told Insurance Business. “In addition, the underwriter must be fluent in logistics and understand how raw materials and finished goods are moved around the world.
“It can be an extremely challenging process that involves both managing multiple modes of transit (e.g., ship, air, rail and truck) and fully understanding a carrier’s legal, or contractual, liability for damage to customers’ goods in their care, custody and control, at all stages of the global supply chain.”
The world is changing very quickly and throwing all sorts of new challenges at marine insurers. They’re now having to think about exposures that come with autonomous vessels and trucks, and even things like drone deliveries in populated areas. Successful marine insurers and brokers need to be agile and prepare solutions to counter these exposures before they result in serious losses.
As business processes become more automated, cyber exposure has emerged as a growing risk within the ocean cargo market and the global supply chain. One only has to look back to the Maersk failure in July 2017, when the NotPetya ransomware attack caused significant business interruption losses to one of the world’s largest shipping container businesses.
“Successful brokers should align themselves with dedicated ocean marine underwriters who have a specialization in cargo and logistics to develop sustainable programs to cover the risks associated with a global supply chain,” Hickey added. “In addition, they should ensure that the selected carrier has an experienced marine risk engineer to help prevent potential claims and experienced cargo and logistics claims adjusters to quickly resolve complex claims anywhere in the world.”