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Semelhante a loss prevention clause in inland marine risk
Semelhante a loss prevention clause in inland marine risk (20)
Mais de Luis Vitiritti
Mais de Luis Vitiritti (20)
loss prevention clause in inland marine risk
- 1. Loss Prevention clauses for inland marine policies How this action can protect the customer's and the insurer's balance sheet Luis Vitiritti. RE Marine Consultant LATAM CMG Member Luis.vitiritti@br.zurich.com Jan/ 2013
- 2. index 1. Abstract 2. Main Inland risk in Latin America 3. Type of risks should use the clause 4. Who is who in the Inland Marine Risk Management 5. Loss Prevention clause 6. Cargo example 7. Securing the shipment 8. Vendor responsibilities 9. What if 10. Management of contracts 11. Risk Management Lifecycle 12. Conclusion: How this action can protect customer’s and insurer’s balance sheet 13. SWOT 14. Appendix
- 3. Abstract • There are some markets where insurers are using specific clauses related to security and risk management . On the other hand, there are places where there are no clauses related to Marine Transportation Risk Management. • The main scope of this paper is to describe how inland transportation policies drive the clause need, especially in high risk zones. • We know that in Brazil and Mexico there are some mandatory clauses from insurers and customers accept this in their policies. But in other places this is very new and needs to be explained. • The goal of this paper is to emphasize the clause needed to protect insurer and customer risk.
- 4. Main Inland risk in Latin America • Robbery, theft and looting are the main risks in cargo care in Latin America. • It is estimated that 60% of the losses are in these three categories, in terms of severity and frequency. • The remaining 40% losses are divided between damage, accidents, fire, flood, etc. • The priority is to ensure that theft risks are minimized involving all business partners to protect the supply chain process.
- 5. Type of risks should use the clause Type of cargo •High Risk Cargoes = >USD 100 k / shipment •Electronics (tablets, notebooks, mobiles) •Chemical products •Medicines / drugs •Plastics •Auto-parts •Toys •DG = Dangerous Goods •Caterpillar / lifts Where •High risk zones (huge cities and borders) •Black market areas
- 6. Who is who in cargo inland risk RMC = Risk Management Company
- 7. Loss Prevention clauses for inland marine policies As is •Customer and broker go to insurer and present customer risk with normally financial and limit conditions. •Underwriter presents a quote according to customer risk and loss history. •UW monitors account results based on losses occurred during the year of coverage. To be •All above plus the following... • Review all contracts and wording clause • Conduct Risk Assessment for customer warehouse, vendors and main transporters to ensure that Zurich policy is followed. • Include a mandatory security clause in the policy, that allows insurer to deny a claim where clause is not followed.
- 8. Clause observation This clause should (be) •Specific and tailor-made for each customer •Avoid misinterpretation •Cover the main supply chain risk for the main risk covered in each policy •Revised after a meeting and/or Risk Assessment made by Risk Engineer specialist in customer risk •Avoid some gaps in the Supply Chain coverage •The clause does not change drivers’ behavior • Mostly drivers are trained by their transportation or logistics managers • Zurich could assist and help customers in fleet management but are not with the driver in all shipments
- 9. Cargo example • Cargo value USD 500 k • Cargo notebook • Loading Salvador Bahia • Unloading São Paulo SP • Shipper Bokia • Consignee Doormart • Transporter ABC Transportes • Distance 1997 km • Telematics on board • Vendor Hired • LPS Presented
- 10. Securing the shipment 1. On board computer + keyboard 2. Break System 3. Door Sensor 4. Window sensor Vendor 5. Lock door system 6. GPS Location 7. Door sensor 8. Door lock system 3 6 9. Fuel sensor 7 10. Additional cargo sensor 4 10 1 9 8 5 2
- 11. Vendor responsibilities (RMC) • Ensure that customer and transporter are following policy conditions and Loss Prevention Program guidance and rules. • 24 X 7 services are: • Driver / Vehicle background analysis • Route and parking places • Monitor telematics information from trucks • Confirm that all sensors are in place and monitored from the beginning of the voyage until the formal delivery at the final destination • Opening of doors must happen only in authorized places • Cargo rescue and prompt response • All losses must be reviewed with insurer and customer to align new security measures • Present formal / monthly KPIs about transporters and risk • Advise customer and insurer if something is missed, fails or needs improvement RMC = Risk Management Company
- 12. What if? RE to vendor • Electronic fail / Sensors and devices • Truck Maintenance • Vendor didn’t monitor the voyage properly • Driver did not follow the LPS Guides / Protocol • All contract followed by customer and third parties? • Customer didn’t inform transporter and vendor about a new voyage. • If someone responsible fails
- 13. Management of contract • Restricted and mandatory wording clause including Loss Prevention Services from Vendor • Review cargo specification in the wording clause and confirm exclusions • Loss Prevention guide from customer • Risk Management contract with vendor • Transport contract from customer and transporter • Customer audit process • All parts responsibilities and audit process
- 14. Risk Management Lifecycle • We need to ensure that all people in the Supply Chain Management are following the policy contract • Loss Prevention should be embraced by all parties • Risk Assessment follow up must be conducted to ensure that all parties are on the same page • All main losses must be reviewed and an improvement response must be conducted • Claim personnel should know the clause and hire loss adjusters that know all service scheme • Cargo Risk Academy must be used trough E-learning modules for UW, RE, Claims, Loss Adjusters, customers, third parties, vendors and etc. • UW, Claims and RE need to be aligned with same objectives to protect customer and insurer bottom line • Meetings with all parties should happen quarterly
- 15. Conclusion: How this action will protect the customer's and the insurer's balance sheet • Customer will see full transparency in this process • Insurer will give better conditions to customers that follow the process • Cargo from customers without losses will arrive at final destination • Balance sheet from customers with fewer losses put them in a better position againt competitors • Insurers with better customers and results will have better process control • Would like to propose Zurich globally to embrace this program • Customers with this program could also decrease frequency and severity in accidents and damages, as additional gain
- 16. SWOT Strengths Weakness •Protect Zurich Bottom line •Customer could leave Zurich •Portfolio control because we are controlling too much •Loss Ratio monitor •Some markets do not have the loss •Audit process prevention culture yet Opportunities Threats •Benchmark customer and •Competition could copy our model terminals •Customer could feel that they will •RE visiting customer and terminalsnever ever have losses •Select best customers •Customer could have more contact •Fast response / PDCA w/ vendor than Zurich •Zurich will be close to customer
- 18. Q/ A thanks Luis Vitiritti. RE Marine Consultant LATAM CMG Member Luis.vitiritti@br.zurich.com Jan/ 2013