Sometimes the reason for a clean slate is a looming complication. So it was for Marsh’s Herman Brito, who had a singular opportunity to completely restructure the master cargo policy for a major multinational corporation.
The client had a captive program without underlying admitted policies. Brito advocated for, then marketed and placed, a commercial policy with reinsured local admitted policies, and even saved some money.
“[Herman] revamped the program to where it’s still global but with locally admitted policies so it allows for claims payments in individual countries,” said the head of corporate risk management. The new structure “removed the risk that the captive was taking in the program entirely. We ended up at around the same price, actually a little bit cheaper. He completely revamped the program with better coverage. We had a claim recently that wouldn’t have been covered previously.”
The risk manager stressed the amount of work involved. “We needed to gather new exposure info on the country level because of the locally admitted insurers. That was quite a lot of information.”
Policy language was a key issue. “The old policy had very specific wording addressing refrigeration. If the transportation company had any type of involvement, if they forgot to set the temperature control, if it wasn’t a natural loss, it wouldn’t have been covered. Now if it’s impaired or ceased to work to our standard that loss is covered.”
With the Client Every Step
Supporting clients’ claims is an essential component of a broker’s work, but Joanna Paredes went one better in getting a positive outcome for her client, and also minimize the actual loss and thus make the claim easier to resolve.
“We had a claim on imported delicate commodities,” said the traffic manager for an international trading company.
“We discovered water damage to some of our shipment in March. Due to the extensive damage among other shipments, the warehouse was doing their best to perform reconditioning in a timely manner.”
However, the client discovered in June that the remaining undamaged portion of the shipment was contaminated with a foul odor. Therefore, they moved the whole lot to another warehouse hundreds of miles away and across another international border for further inspection.
“We were finally able to sell all the goods after a rebagging process,” said the traffic manager. “Joanna walked with us for every step to generate a supplementary claim.”
As Paredes has other clients in similar lines, some using similar supply chains, she takes a holistic approach. One client, based in Mexico, recalled how Paredes came to one of the main ports in that country. She inspected warehouses from their storage systems to their fire and flood protection, and then made recommendations to clients on guidance they could give to their transportation and storage operators.
In the fever dreams of some risk managers lurk massive components worth many millions of dollars that take years to manufacture, reticent underwriters and looming regulators.
Those dreads became reality for Marsh’s Ali Rizvi when a client retrofitted an old heavy-industrial site.
“Permit appeals and regulatory issues delayed the financing by a year, and during that time there were several starts and stops in placing the construction insurance program,” said the CFO. “By the time it is all finished, there will be more than 400 barge deliveries from a staging site 30 miles away. Ali was instrumental in making all this possible.”
He has been “able to identify and resolve issues related to terminal operator’s obligations, vessel owners, and charterers. Thus not only helping the business move along, but also ensuring that our rights are protected, and that we only assumed contractual obligations. Those can either be transferred down to contractors, or insured.” The solution included placing several hundred million dollars’ worth of project cargo delay-in-start-up insurance.
Another client said that she trusted Rizvi with “all her marine energy risks.” As risk manager for a major global firm, she noted that 2015 was a very difficult year for the energy sector, in which many significant projects were cancelled, delayed, or changed. That required constant revisions and updates to in-place insurance.
A Skilled Liaison
One of Andrew Smith’s client companies went through a corporate restructuring, which is complex from a risk management perspective, particularly in a renewal.
“Andrew helped us work through a complicated underwriting process and has coordinated the primary and excess carriers to help them understand how data is presented. He helped communicate with carriers during the renewal and explained the issues that arose when gathering underwriting information. He acts as an excellent liaison between our company and the market, which is limited in the number of carriers available for our portfolio. His input assisted us in understanding the actual exposure generated by our operations — marine and boat, diving and swimming,” the client’s insurance and risk manager said.
Another client is a family-owned business. Smith had to field the opinions of numerous family members, stressed as they were due to some of the marine-related sectors of the economy showing weakness.
The insurance budget was tightly limited by economic circumstances, and the client’s treasurer said that Smith reduced premiums while maintaining or expanding terms and conditions. The treasurer noted that the company’s many different lines of business add complexity, but that Smith was able to differentiate those segments to the carriers. That helped them become comfortable with actual rather than perceived risks.