‘Good risk control judgement reduces premiums’

Your risk management control
should be good enough to
see you having to make an
insurance claim only when an
‘act of God’ accident occurs,
according to Mike Brews,
chief operating officer of
Associated Marine.
“As insurance brokers,” he
told FTW, “we should only
be involved in a catastrophic
event – an incident caused by
bad luck, not bad judgement
on the part of the insured.”
And good risk control
judgement, he added, also
plays the invaluable role
of reducing a company’s
premium costs, and costs in
general.
“From our perspective,”
said Brews, “the rating in an
insurance policy is dependent
on the risk management tools
that the shipper has in place.
“The benefits of risk control
refer to all areas of insurance.
The more control measures in
place the lower we assess the
risk and rate it accordingly.”
Brokers often even demand
certain control measures to be
in place, for example in highvalue,
high-risk goods such as
computers. They may require
armed guards to accompany
such consignments, or
vehicles having to travel in
convoys.
“Such preventative
measures,” said Brews, “are
essential for insurers to be
able to keep premiums within
reasonable limits in a highrisk
environment such as we
face today, and for the insured
to be able to control their own
costs.
“It also reinforces
our philosophy that we
should only be involved
where product damage is
unavoidable, not where it has
occurred because the shipper
badly packed his goods
and this led to them being
damaged in transit.”
The biggest risk
management divide in the last
half century, Brews noted, has
been the shipping container.
“That’s had a massive
effect on the claims from
seafreight shipping in the last
20 years, once containerised
transport became the norm,”
he said. “With some 90% of
product transport, excluding
bulk goods, being moved in
containers, rates have dropped
by close on 100 times.