Tighter market has forced rise in premiums

“THE INSURANCE market as a whole has been tightening up of late, though premium increases have not been as severe as those in the non-marine sector,” says Association of Marine Underwriters of SA (Amusa) chairman Dave Keeling. “There has been a global increase in reinsurance costs during the past year, heightened by the September 11 events 18 months ago in the US, and this has increased insurance premiums down the line. The increases seen in our sector are relatively insignificant compared to those being experienced in non-marine areas. “The local market began targeting airport security as far back at 1994, when security companies came onto the scene. It is common practice to insist that high value goods be secured by the appointment of independent security contractors as some goods are basically uninsurable without the additional security these appointments bring,” he said. “We have been talking to Airports Company of South Africa (Acsa) and a liaison has been created that may assist in combating problems. “Right now, however, I think Acsa has its hands full dealing with problems at Johannesburg International, but we are there to help ensure that risk management is carried out.” The human element with accompanying inefficiency is, however, a major problem facing insurers of cargo, says Keeling. It applies at all levels of transportation where the documentary trail is not being completed as required. Too many people along the supply chain are either too busy or ‘couldn’t be bothered’ to ensure everything is in place, he says. “Down the line we find that clearing agents often don’t endorse documents and receipts in the proper manner. Seals are tampered with or changed, but these incidents are not recorded. “When the cargo is finally collected the remarks on the documents are all too often not specific. The word ‘damaged’ is often the only statement made when items are either missing or have been tampered with, and this is insufficient for proper investigation to be carried out. In the final leg of the cargo’s journey, where this is the case, the opportunist has an excellent chance to feather his nest.” Cargo risk management is all about prevention, and the relentless pursuit of smarter and more effective mechanisms to keep cargo safe affirms the industry’s commitment to this undertaking. FTW takes a closer look.