By Anne Freedman
In the 17th century, ship owners, sailors and merchants were instrumental in creating the business of maritime underwriting as they shared tidings at Lloyd's Coffee House in London.
Jorge Pecci, executive vice president and head of growth economies, global marine at Chartis, sees his role as being a modern-day successor to those early underwriters.
Those ship owners, who also often captained the vessels, "knew risk," said Pecci.
"They knew the routes. They knew the vessels. They knew the different types of cargo. Because of that knowledge of risk, they were able to take it from somebody else.
"I think the industry, for one reason or another, little by little, has lost this knowledge of the risk."
Before entering the insurance business, Pecci was an officer and later a captain, sailing the world -- but for the Pacific Ocean -- on a variety of different types of vessels, with different types of cargo and under different flags.
"He rose through the ranks very quickly. ... He achieved it at a very young age," said Richard J. Decker, Pecci's boss and president of Global Marine for Chartis.
"You have to understand -- a vessel at sea, with the risks that that bears, the responsibilities that that brings. You have millions, hundreds of millions of dollars of assets under your control and command. You have the lives of your crew -- these are tremendous responsibilities," Decker said.
"The people who can accomplish that," he said, "have tremendous leadership skills, obviously. You make all kinds of decisions in very difficult moments -- and that is his background. That's where he comes from."
Pecci's first conscious exposure to the insurance industry came in 1989, when he was the second mate on a voyage from Newfoundland, Canada, to Baltimore, Pecci said.
"I was seeing that what was being done to secure the cargo was inappropriate," he said, noting that he learned later the captain planned to better secure the cargo at sea because it was less expensive than paying for it to be done in port.
When he expressed concern to the captain and first officer, he was told, " 'Don't worry about it. We know better.' I put some notes on the log book about my disagreement ... on how to secure the cargo."
The ship left port and the cargo never was better secured -- a situation that nearly caused the ship to sink after it was caught in a brutal storm, he said. The vessel ended up limping into port, listing permanently 15 degrees to starboard.
"The captain and chief mate were dismissed and I was appointed captain," Pecci said.
He was 26 at the time, and thus began his contact with insurance companies, "because everything was destroyed in the vessel."
"I found it fascinating," Pecci said. "That was probably the first click on me about insurance: 'It's not that boring,' I said."
Although he spoke with AIG in 1989 about an insurance position, he wasn't ready to leave the seas just yet. But the glory of spending nine to 10 months at sea, although not in one long stretch, began to pale when he married in 1993.
That same year, he became a maritime claims supervisor for AIG in Argentina, where he lived for a great deal of his life.
CHARTING HIS OWN COURSE
Born in Rochester, N.Y., where his father was a professor at the University of Rochester Medical School, Pecci moved to Argentina at 5, and resided there until he moved again to Rochester when he was 15, although he also spent time in Berlin and Sao Paulo, Brazil.
He returned to Argentina when he entered the Maritime Academy, breaking with his family's tradition: His father, grandfather and uncles were all doctors. He later earned a master's degree in maritime law and a post-graduate degree in maritime surveying.
"I still miss the brig of the vessel big time," Pecci said. "I do believe that hands-on experience is a tremendous value to my everyday business and my group."
Today, Pecci oversees emerging growth areas, including Asia-Pacific, Latin America, the Middle East, Africa and Commonwealth of Independent States countries such as Russia, Belarus and Ukraine. He also is a member of Global Marine's executive committee.
Previously, he served in a variety of positions in marine loss control until becoming senior vice president of AIG Global Marine in 2006, with all regional managers outside of the United States and Canada reporting to him. Along the way, he developed an international loss-control network that is "best in class," Decker said.
These days, of course, pirates -- and kidnap and ransom cases -- are the rocky shoals of the shipping industry.
CRIME ON THE HIGH SEAS
Instead of the stereotypical hard-eyed marauders, the pirates are sometimes "very skinny little people [who are] very hungry, looking for food." That was the case with one gang of pirates in Nigeria who attempted to board one of ships Pecci helmed. "We managed to control this," he said, unflappably and without adding much detail. "They went back to their skiffs and left."
On another voyage, Pecci's ship was anchored near a vessel also owned by his company. About 2 a.m., that ship was boarded by pirates, he said. The crew arrested them and held them in the ship forecastle until that country's coast guard arrived.
He declined to name the port because, he said, a minute after the coast guard "took the three pirates ... they stopped their engine. I heard three or four shots and three or four splashes. The coast guard killed the guys right on the spot. This is the environment."
Piracy, these days, is more of a business that offers fairly low risks and high returns. "It's a very organized crime."
And it is "disrupting the whole shipping industry. ...Unfortunately, it's spreading," Pecci said.
Adding to the problem for naval forces attempting to provide protection in the dangerous vicinity of the Gulf of Aden is the area's vastness. "This is like having someone in Rome pickpocketing your wallet and now you are calling the policeman in Sweden for help," Pecci said.
Some in the shipping industry are providing their own protection by having armed security on board, he said, but noted that option offers its own risks.
One unfortunate situation earlier this year in the Kerala waters off the southwest coast of India left two Indian fishermen dead. Two members of an Italian naval team mistakenly thought the Indian fishermen were pirates and shot them, according to press reports. The incident sparked a diplomatic row between the two countries and the two Italian sailors were charged with murder.
While Chartis' Global Marine unit is mostly focused on cargo issues, the company is currently working on more than 25 "major kidnap and ransom cases," mostly from Somalia, Pecci said. "The latest ransom was over $9 million (on a ship that was not covered by Chartis). We are talking about a lot of money here," and that doesn't even include other costs, such as hiring professionals to deliver the ransom, losses due to the vessel being out of service, and the repatriation and care of the crew.
Mike Coyle, Chartis marine division executive in the United States and Canada, said Pecci "knows sometimes, I think, ahead of the industry how to treat piracy, but also understands the dangerous and possible problems of arming crew."
"I refer to him as the epitome of a corporate asset," said Coyle. "He personifies what you are looking for in a person -- to be that resource, that teacher and mentor, but also a person who can effectively opine on many of the topical situations in the maritime field.
"From a personal perspective, I think it's important for everyone to know that he's very personally and affectionately referred to as Captain Pecci," Coyle said. "He commands that respect."
ANNE FREEDMAN is senior editor of Risk & Insurance®. She can be reached at email@example.com.
October 1, 2012
Copyright 2012© LRP Publications