‘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.