Purchasing Ocean Marine Insurance Requires Complex Buying, Coverage and Service Considerations For Global Companies
Loss control, extensive geographic footprint, claims response and subrogation/recovery are critical areas of expertise a carrier can provide a global importer/exporter, according to David French, President of Starr Marine, a member of Starr Companies. Starr Marine, an ocean marine specialist since 1945, provides ocean marine services and products including Cargo, Multinational Programs, Marine Liability, Inland Marine and Hull insurance.
"Of course, no importer/exporter wants a loss disrupting their all-important buying/selling relationships and goodwill with clients. First and foremost, that means a major focus on claim prevention and loss control," French said.
For example, one Starr Marine client, a large computer manufacturer who ships globally, was encountering a rash of thefts in several locations and warehouses. When Starr began working with the client, its global loss control team focused on the case and turned the client's situation around by eliminating the theft issues and making other effective loss prevention suggestions.
"Working with the broker, we have seen tremendous success with this client," French said. "The best part is the client wound up saving money due to a reduced premium rate by working with our loss prevention services."
French said Starr will get very "granular" with a client on the loss control front if necessary, right down to the individual warehouse if the need arises, as it did with the computer manufacturing client.
A second critical consideration for buyers is the ability of a marine cargo carrier to offer policies, manage claims and conduct loss control efforts in many locations. Starr Marine, for example, has one client that is a large manufacturer and exporter of heavy equipment.A second major client is a very large retailer with a global footprint. Though the clients come from two very different business sectors, they share similar ocean marine coverage concerns and considerations. Between the two, French said Starr has put 30 overseas policies in place to ensure those key clients can safely get their goods into countries and keep the bottom line healthy.
"The premium paid should cover a network of services from an ocean marine carrier who has the right people in the right places around the world," French said. "It is critical that an ocean marine carrier actually be local, not just say they are. You can't sit in three primary hubs globally and provide services for global clients. You need to have the resources in place, either your own people or outsourced professionals where you have no presence."
French noted that while global companies expect the best underwriters who can assist them to operate legally by issuing the proper local underlying policies; they also are paying for expert claim professionals for each specific geographical area, another primary consideration.
"Naturally, the first goal is to try to prevent claims, but they do happen," he said. "For any world-class ocean marine provider, the true face-to-face customer experience is how quickly you react to a claim. It is all about building and maintaining client goodwill."
Other key considerations include recovery and subrogation, which can be very important when cargo becomes damaged due to a third party's actions.
"Clients expect their marine cargo carrier to fight for them in these situations," French explained.
French said that in today's tough global economic climate and soft insurance market, it seems only logical that companies seeking ocean marine insurance coverage would look to save by shopping on price alone. But in the long run, that could easily prove to be an unfortunate business decision.
"When an insured buys a marine cargo policy, price may seem like the most important factor," said French, a veteran of the marine cargo business. "But the truth is, there are very important attendant global services that go well beyond price -- loss prevention, local policy and compliance capability, claims adjusting and recovery/subrogation -- to ensure the best possible outcomes for insureds."
And with economists predicting that exports will play an integral part in any U.S. economic recovery, the critical role cargo insurers play in the nation's economic well-being is clear.
"Marine cargo coverage is a value proposition across the board, with the inevitable result being lower costs through loss control and subrogation resulting in the right price for the coverage," French noted.
"In terms of the supply chain, no one wants to have their customer relationships disrupted," French concluded, adding that Starr Marine regularly maintains an impressive over 90 percent client retention ratio. "Are there carriers who sell coverage without the attendant services? Of course. But a company like Starr Marine can hedge cycles and use its world-class service to differentiate itself. For many of our clients, we are not the least expensive option, but we still get the business. That speaks volumes about us."
To learn more about Starr Marine, visit starrcompanies.com.
(The above piece is part of our continuing Insights series designed to highlight key products and services to our readers. This paid-for Insights was written and edited by Risk & Insurance®
on behalf of our marketing partner. Additional Insights can be found on our Web site at www.riskandinsurance.com/.)
August 18, 2011
Copyright 2011© LRP Publications