The first phase of a new product that allows importers and forwarders to arrange marine insurance cover simply has been launched in South Africa.
The man behind it is Arnold Garber, who, with his brother Manuel, changed the way customs clearing agents in South Africa served their clients with his system then known as Compu-Clearing.
At the recent Freight News 50th anniversary celebrations in Johannesburg, Garber outlined why he had developed the new service.
“My new project, Garfin, is an online interactive marine insurance system. When we look at the world of InsureTech, the life insurance industry is certainly well-organised with technology. The promoter of life insurance can come to your house, ask you some questions like health, age etc, and give you a premium online. Even with motor insurance, you can enter the make of a car, the model, the year etc and get a premium instantly. With marine insurance, the systems are still mostly manual and most automation is just a couple of spreadsheets. Marine insurance is so much more complicated because the claims can happen anywhere in the world, the cargo can be anything, and the circumstances are so varied.
“There are two types of insurance situations. There is the major conglomerate that will make a major importation of millions of dollars in maybe a few hundred containers. But then there is the other situation of a spare part that needs to be brought in overnight by air from Europe, and there is just no time to arrange for its insurance. By the time the importer of the spare part gets a quote from a broker, the part is already in South Africa. With the Garfin system, data is keyed into the system and a premium is produced automatically, online, without any manual intervention - and the policy document is produced instantaneously. The premium can even be paid by credit card,” said Garber.
The Garbers revolutionised the customs clearing and freight forwarding industry in 1984 by pioneering the first computerised customs clearance to the industry. Compu-Clearing Outsourcing very soon became the dominant force of IT systems in the freight industry. Soon, the majority of import customs clearances were done through their system. Compu-Clearing grew, and by 1998, when it had some 90 employees and its own data centre, it listed on the Johannesburg Stock Exchange. Compu-Clearing also represented Cargo Wise in South Africa. In 2015, WiseTech Global, which by that time was listed on the Australian Stock exchange, acquired Compu-Clearing in South Africa.
“The idea for Garfin first went through my mind when I was still running Compu-Clearing. I remember an instance where an airfreight shipment was flying from Frankfurt to Johannesburg and was transhipping in Addis Ababa. The flight from Frankfurt to Addis was delayed. The cargo missed the connection to Johannesburg. The flights of Ethiopian for the next few days were full, so the cargo remained in the blazing sun on the tarmac of the Addis airport. Eventually, a flight was found and the cargo reached Johannesburg, but by that time the goods were damaged. The importer blamed the forwarder because he said that the forwarder is supposed to take care of all items relating to the transfer of this cargo. The importer expected the forwarder to arrange customs clearing, the freight, the transhipment, the packaging, and the local road freight to get it to its final destination, so therefore, the importer expected the forwarder should also have arranged marine insurance. The importer expected the forwarder to pay for the damage to the goods. The forwarder said that insurance is the responsibility of the importer and should have spoken to its broker.
“It occurred to me then that if the forwarder was able to offer insurance, he would complete his service offering to the importer, eliminate the situation where the importer did not take care, and on top it all, the forwarder could earn a little bit of extra revenue because of the referral fee to the broker.
“Forwarders without a Financial Services Provider (FSP) licence are not allowed to "sell" marine insurance, but they are allowed to refer insurance. The Garfin system offers the forwarder the possibility of offering, instantly, marine insurance via a Garfin-associated broker, or the forwarder can use their own broker.
“The system runs on a web browser and is available 24/7. We have teamed up with Lombard insurance via its underwriting manager Horizon Marine.
“The first product that we launched was the "one-off shipment" insurance product where the main benefit is the convenience factor for the sporadic importer or exporter, also suitable for SMEs.
“Towards the end of 2022 we launched the open policy system targeting major corporates, major retailers, and regular importers and exporters, where policies are issued, say for the year, and then a declaration is made for each import shipment,” said Garber.
