Broker sees opportunity in marine insurance policy

Marine insurance is a fairly standardized offering, but an RK Harrison broker sees potential growth from this policy.

Catastrophe & Flood

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With headquarters in London, insurance broker RK Harrison sits at what is arguably the center of global trade. From there, Darren Norris—the broker’s executive director of cargo and stock throughput—has watched demand for ocean marine insurance fluctuate along with global trade since he began his marine insurance career in 1987.

While the industry is generally a quiet one, Norris sees opportunity on the horizon as the world economy continues to rebound from the financial crisis of the late 2000s.

“When the economic crisis was in full flow, everybody’s budget was reduced. Therefore, they bought what they had to buy,” Norris told Insurance Business. “Now, in my opinion, there seems to be a little bit more money in the budget. They’re starting to buy more interesting lines of coverage.”

One of those “more interesting” policies is stock throughput insurance, a policy that provides cover for all of the insured’s moveable goods whether in transit or in storage. While this cradle-to-grave policy has been available for quite some time, Norris says RK Harrison is seeing increased demand for stock throughput as more companies become aware of its existence.

“[Stock throughput] has been around for a long time now—many, many years—but to some people, it’s still a new concept,” he said. “There has been a rapid increase in inquiries for stock throughput, with many new clients coming to us.”

The attraction of the stock throughput policy lies in its efficiency. Instead of seeking separate policies for property and transport, which could result in coverage gaps, brokers can identify one policy covering all import/export and storage needs.

“It works exceptionally well for independent brokers because they work together with property and transport carriers,” Norris commented.

The increased interest in stock throughput isn’t just something the London market is experiencing either. RK Harrison works in tandem with several US brokers, working on their behalf to provide stock throughput policies for clients.

However, a recent industry report suggests finding affordable premiums may be difficult.

Marsh’s 2013 Insurance Market Report suggested that stock throughput rates could be on the rise following disasters like Superstorm Sandy.

“Cargo and stock throughput underwriters are looking more closely at their catastrophic risk exposures and aggregates…and may attempt to modify coverage terms or conditions or to seek slight premium increases for higher hazard risks,” the report said. “An increase in attritional losses in 2012 has caused cargo and stock throughput underwriters to seek higher deductibles or to re-evaluate specific coverage terms.”

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