Post on 22-May-2015
description
Also in this issue:• Worldtrade:Theonlywayisup• Doingtherightthing(compliance)• Learningfromclaims• Declaringgeneralaverage• Salvage
Protectingyour
assets in transit
insightsmarine risk june 2011
22
Contents
03 Welcome
03 introduction
04 World trade: the only way is up
07 Doing the right thing
10 Learning from claims
14 Declaring general average
15 Case study 1: where is my cargo?
16 salvage – posting security
17 Case study 2: there’s a hole in my container!
18 Obligations in international trade
20 Transport your goods safely, on time and without losses
22 ensuring safety in the packaging of containers
24 risk engineering: Greater peace of mind
28 Projects: the way ahead
31 Piracy: not going away
36 Zurich international research and Development Centre of shipping and Finance
38 Contributors
insig
hts 11
3
WelcomeWelcome to this edition of insights on Marine.
In this insights, we look at how world trade is recovering, the lessons
that can be learned from claims, and the benefits of risk engineering.
Above all, we look at how you can benefit from integrated teams, with
underwriting, claims and risk engineering all working together
for the benefit of our customers.
We also bring you the latest information on buyer and seller
obligations in international merchandise trade, the moves towards a
consensus on what needs to be done about the issue of safety in the
packing of containers, the current focus on compliance around the
world, and the latest picture of the Somalian piracy threat.
Kind regards,
Lee meyrick, Chief underwriting Officer Marine, Zurich
Introductionis there light at the end of the tunnel? Are we through the recession? The latest figures from
the World Trade Organization (WTO) certainly suggest
that things are improving rapidly, with the fastest growth
in the volume of exports ever seen since records began.
The WTO believes the longer-term trend will be for more
modest growth, but it is growth nevertheless.
However, it is not all good news. There are many more
General Average claims being declared, cargo theft
has increasingly become the domain of large organized
criminal gangs, and piracy remains a potent threat.
The infrastructure in some developing regions continues
to be a concern, and the handling of cargo is a problem
in some areas as a result of a lack of training.
But all of these various concerns are being addressed by
industry, insurers and governments, with varying degrees
of success. Insurance, of course, has an important role to
play, and Zurich is determined to help its customers find
solutions, through insurance protection, through risk
engineering, and through sharing of best practice.
It has been a tough two or three years for companies in the import/export business or transportation sector. World trade saw a major dip in 2009 – The united nations Conference on Trade and Development (unCTAD) described it as an unprecedented trade contraction, revealing that merchandise exports dropped about seven times more rapidly than global gross domestic product.
Worldtrade:theonlywayisup
4
insig
hts 11
5
insig
hts 11
line with forecasts from unCTAD that the shipping
industry and seaborne trade are recovering, but it
will take beyond 2011 to return to 2009 levels.1
Asia: the engine room for world trade growthDespite the economic downturn, Asia is still driving
global trade. Asia exhibited the fastest real export
growth of any region in 2010 with an increase of 23.1%.
This was led by China and japan, whose shipments to
the rest of the world each rose roughly 28%.
In 2010, China overtook Germany as the world’s leading
merchandise exporter, accounting for almost 10% of
world exports, and is now second to the uS on the
import side, accounting for 8% of world merchandise
imports according to WTO fi gures.2 The growth is
particularly in infrastructure projects – Indonesia,
Thailand, and China are all ploughing billions of dollars
into their infrastructures – building power stations,
bridges, and roads. And naturally, it has an impact on
cargo transportation.
• International seaborne trade contracted by 4.5% in 2009
and fell below 2007 levels from the all-time high attained
in 20081.
• estimates put total seaborne trade during 2009 at
7.84 billion tons, according to the unCTAD Review.1
• The World Trade Organization (WTO) said that the global
economic crisis in 2009 caused a 12.2% contraction in
the volume of global trade — the largest decline since
World War II.2
• The value of world merchandise exports fell 23% to
uSD 12.15 trillion in 2009, while world commercial
services exports declined 13% to uSD 3.31 trillion.2
Recovery in 2010But there was a good recovery in 2010. According to WTO
fi gures, the volume of exports in 2010 rose by a record-
breaking 14.5% (the fastest growth since records began in
1950), enabling world trade to recover to its pre-crisis level
but not its long-term trend. Developed economies recorded
export growth of nearly 13% in 2010, compared to a 16.5%
average increase in the rest of the world.3
Announcing the fi gures in April 2011, the Director-General
of the WTO, Pascal Lamy, said: “The fi gures show how
trade has helped the world escape recession in 2010.
However, the hangover from the fi nancial crisis is still with
us.” WTO economists forecast that world trade growth
should settle to a more modest 6.5% expansion in 2011.4
Cautious optimism for the futureWhile there is no tangible ‘feel good factor’ in the import/
export trades, since 1 january 2011 we have seen cautious
optimism in europe in terms of turnovers – customers are
talking about modest increases, but they are still very small
and certainly not yet back to the levels pre-crisis. This is in
1 The UNCTAD Review of Maritime Transport 2010, December 20, 2010: http://www.unctad.org/en/docs/rmt2010_en.pdf
2 WTO News Release March 26, 2010: http://www.wto.org/english/news_e/pres10_e/pr598_e.pdf
3 WTO News Release April 7, 2011: http://www.wto.org/english/news_e/pres11_e/pr628_e.htm
4 WTO News Release March 14, 2011: http://www.wto.org/english/news_e/news11_e/rese_14mar11_e.htm
5
>
effects of the downturnThe economic downturn has had a major
effect on companies in the import/export
business or transportation sector, not least
the decline in demand for goods which saw
trade levels fall globally. But the downturn
has also resulted in cost-cutting across the
sector. This has impacted crewing levels and
quality of crews, and resulted in reduced
investment, if any at all, in training, vessel
maintenance, logistics quality and risk
engineering. As the recovery proceeds, all
of these areas will require additional
investment to ensure that losses and delays
are kept to a minimum.
new challengesDespite the temporary impact of the
economic downturn, globalization continues
apace. More and more companies fi nd
themselves looking to overseas markets,
either to sell their products or to import
goods or commodities. This creates new
challenges for companies in terms of
unfamiliar territories, changes in where
the suppliers and markets are, and of
course logistics.
One of the biggest challenges is ensuring the
effi ciency and strength of the supply chain.
Breaks in the supply chain can be costly and
impact on profi ts. There is a much greater
risk of this where global trade results in an
extended supply chain. As a result, active
supply chain management is increasingly
necessary to ensure that weak spots are
identifi ed, alternatives prepared, and
business interruptions minimized.
Commodities andhi-tech productsAs well as infrastructure projects, there is
also a focus on commodities. There are
huge amounts of hard commodities –
iron ore, steel, coal – moving into the
Asian region from Australia, India, and
South America.
And then there are a lot of fi nished
products being produced by China, Taiwan,
Korea and japan and exported outwards,
such as hi-tech products like smart phones,
portable media players and 3D TVs. The
entire Asian region is continuing to see
high levels of trade, both import and
export: the raw materials being imported
and the fi nished products being exported.
6
>
insig
hts 11
Globalization and the steady growth in world trade have
meant a growing demand for global insurance programs,
and in particular for marine insurance. At the same time, the
economic downturn has resulted in a fundamental change
in the area of compliance, and this has had a major effect
on the purchasing of marine insurance.
rightthingCompanies that trade internationally face many challenges, not least of which is the issue of insurance protection.
Regulatory restrictionsMany countries around the globe have some form of
regulatory restrictions, which are designed to protect the
local market. These include:
• local policy taxes (admitted insurance)
• restrictions on non-admitted insurance
• compulsory insurances
• reinsurance restrictions
• exchange controls
• national pools.
Doing the
7
>
existing regulations are being strictly
enforced more than ever before as countries
face increasing fi scal pressure.
The aim is simple: to keep premiums within
the country, and to raise revenue by taxing
those premiums. As a result of the downturn,
many countries are looking to have their own
internal insurance industries, even if it is just
for tax revenue purposes, and this is driving
a lot of the regulatory issues.
Consumer protection lawsIncreases in consumer protection laws have
been driving the need for locally admitted
policies. Countries are increasingly looking to
protect consumers in their territory by only
allowing insurance with insurers that are
regulated by the country. Governments
want to ensure that there is recourse to
a local insurer in the event of something
going wrong.
use of non-admitted insurance is simply not
an option in many countries. Countries may
insist on an admitted insurer for all
insurances or for compulsory insurances.
There may be compulsory cessions to
national pools related to terrorism,
environmental insurance or taxation of non-
admitted insurance.
Greater protectionismIt is all part of a wider move towards greater
protectionism around the world. A report
last year, “G-20 Protection in the Wake of
the Great Recession,” 5 commissioned by the
International Chamber of Commerce’s (ICC)
Research Foundation found that all G-20
countries have implemented protectionist
trade measures over the last two years.
By September 2009, the G-20 were
responsible for 172 such measures being
implemented, with hundreds more in the
pipeline. The report said that “the sweep
of protectionist policies in the wake of
the Great Recession is alarming.”
ensuring complianceFor the trade and shipping sectors, alignment
with insurance regulations is becoming a
crucial factor. This is not only because there
may be problems with recovery, or with the
ability to have a claim paid to the company
where it is not locally represented, but also
because of the issue
of fi nes. This is a topic that affects the
insurer, the broker and the insured, all of
whom can be hit by fi nes, which in some
cases can be substantial.
Therefore, when choosing a carrier,
international companies should be
increasingly focused on the carriers’ global
capability. As companies look to expand into
new territories, with new suppliers, or new
markets, they need to know that they are
fully compliant.
A report last year, “G-20 Protection in the Wake of the Great Recession, ”commissioned by the International Chamber of Commerce’s (ICC) Research Foundation found that all G-20 countries have implemented protectionist trade measures over the last two years.
8
>
5http://www.iccwbo.org/uploadedFiles/ICC/iccrf/G20_Protection_in_the_Wake_of_the_Great_Recession.pdf
insig
hts 11
9
Local representation Take, for example, a uK company
representative who visits a Kenyan trade
show and sells products, which are later
shipped to Kenya. If these products are
damaged in transit, that company is unlikely
to have any representatives in Kenya to take
care of the problem. Compliance goes
beyond just making sure the paperwork
ties up – it is also about coming up with
a bottom end solution when things do
go wrong.
Marine is one of the few areas where this
can happen, where you can have a claim in
a territory where you may not have any sort
of base or representation. Many claimants
are outside of the country where the policy
is produced, and so global delivery becomes
a crucial element.
With the globalization of trade, there is a
particular issue for compliance when goods
go into storage and distribution.
Where goods are being stored in a country
in which a company has no representation,
and where there is inland transit within that
country, from the warehouse distribution
to the retailer, it may be vital to have local
policies that will respond in the event of
a loss.
Added valueThis is why a multinational insurer who can
provide locally compliant solutions can add
value. Due to their reach, multinational
insurers have qualifications to identify and
understand the regulations of a particular
local jurisdiction, and work within the
confines of those regulations as well as
regional and global sanctions, all within a
centrally controlled overall program.
Multinational insurers can offer, through
their local resources, the ability to conduct
the requisite local vetting that is needed for
claim-related activities, to ensure compliance
with the regulations.
If these products are damaged in transit, that company is unlikely to have any representatives in Kenya to take care of the problem
Customer checklist: Insurance complianceIs non-admitted insurance allowed?
Are there financial penalties associated with non-admitted insurance?
What are the local premium taxes?
What other taxes may be applied (excise tax, stamp duty, withholding tax)?
What are the compulsory insurances?
What compulsory cessions are required (national pools, reinsurance, etc)?
How can premium be fairly allocated across subsidiaries?
Can claims be paid to the local subsidiary?
10
Learningfrom claims
In an economic downturn, there is typically an increase in the frequency and severity of marine claims. This may be the result of cost-cutting affecting crewing levels and expertise, a lack of regular maintenance, or vessels being laid up for an extended period.
10
11
insig
hts 11
insig
hts 11
Cargo theft claimsAlthough largely unrelated to the economic
downturn, theft and hijacking of cargo is an
increasing problem. There is still a very high
frequency of the targeting and successful
theft of consumer retail goods, particularly
consumer electronics, pharmaceuticals and
high-value commodities that are easily sold
on the black market, especially in South-east
Asia and Latin America.
In the uS, perhaps surprisingly, it is food and
beverages that are most commonly stolen.
According to FreightWatch International’s
Bi-Annual Cargo Theft Report (july 2010),
food and beverages (notably meat products,
canned beverages and raw products such as
sugar and coffee) are the most commonly
stolen cargo products in the uS, accounting
for 22% of all theft incidents. This is followed
by electronics, which account for 19%.
There has been a noteable shift in the area
of marine theft claims globally, from low
value pilferage claims to an increase in the
hijacking and theft of full container loads.
They are fewer in number but much bigger
in value. Rather than the uSD 5,000 or uSD
10,000 pilferage claims that Zurich used to
see in the 1990s, we are now seeing uSD
500,000 or uSD 1 million theft claims.
In the past: PilferageCargo security within containers was a
challenge in the past. The industry tended to
consolidate smaller loads into one container,
which meant containers had to be opened
and closed a number of times during the
transportation process, resulting in high
levels of pilferage. Pilferage happened largely
in the ports where the stevedores would
help themselves to the goods being shipped.
Today, with fewer consolidated loads and
improved container security, pilferage has
largely gone away. For example, doors can
be locked in such a way that they cannot be
broken into without it being obvious.
Additionally, security at ports has increased
as a result of the threat of terrorism, so it is
now almost impossible to get past the gates
without significant security clearance.
now: Organized criminal gangsTheft is now on a much bigger scale and
involves organized crime due to a lucrative
black market. With the expansion of the
global economy, goods can be ordered easily
and quickly on the internet from anywhere in
the world, with the consumer having no idea
of the source of those goods and whether
that source is legitimate.
The opportunities created by significant
values concentrated in a container, as well
as the lack of traceability and the ease with
which goods can be sold in a market where
it cannot be tracked, has made cargo theft
much more attractive. Organized criminal
gangs are now sophisticated. Specific goods
can be targeted for theft and stolen or sold
to order based on the demand of the
black market.
11
>
The increase in major hijacking and violent
crime is also due to the fact that the
distribution network is changing. In the uS,
for example, many of the high-value goods
that enter the country come in via Mexico
where criminal gangs are much more active.
Is your product in demand?An example of how organized the criminal
gangs now are, and how they steal to order,
was highlighted during an analysis of a
customer’s loss portfolio. The customer had
seen the number of thefts of one of its
products, a mobile phone, fall signifi cantly,
to virtually none in the previous 12 months.
The reason was not an improvement in
security or re-routing – it turned out that
no-one wanted their outdated product as it
had been replaced by demand for newer
technology in the form of their competitor’s
smart phones. That customer was preparing to
launch a smart phone of their own, and Zurich
warned them to prepare for a signifi cant
increase in theft. Zurich is working with them
now to mitigate this increased exposure.
Sophisticated criminals tracking cargoCriminal gangs are stealing containers,
attacking warehouses where the products
are stored, and taking products that are in
strong demand. The sophistication of these
criminal gangs is highlighted by their ability
to exploit online freight exchange websites
by hacking into those sites and ‘stealing’ the
information. Additionally, the ease of access
and user-friendliness of cargo tracking
facilities offered by large forwarders and
transport providers also represents a new
potential security threat to shippers of
valuable or high-target goods.
The industry has become much better at
securing container shipping information from
the days when terminals would post
information about the shipper and container
number for all to see. There is, however, still
enough criminal reconnaissance conducted
by gangs that allows them to literally ‘shop’
for what they want to steal. This is a problem
as much in northern europe and the uS as it
is in Mexico, Argentina or Brazil.
It is clearly important for companies to assess
the security around their own website, or the
website that they are using to track their
cargo. This should, however, only be one
part of an overall integrated network of
security and loss prevention measures.
12
>
>
insig
hts 11
insig
hts 11
Claim protocolsClaim protocols are documents issued
after the inception of a marine policy that
establish the people and process involved
in mitigating a loss after it occurs. It is
vital to have them in place for the
following reasons:
• Claim protocols identify all personnel
from the insured, insurer and the
producer who should be involved in the
loss, and the process by which the claim
will move from first notice of loss
through settlement and recovery.
• They allow the insured and the insurer
to discuss potential claim situations
before they arise and determine how
they will be handled and who will be
notified. In this way, when a loss occurs,
everyone involved is familiar with the
process and can quickly react to mitigate
the loss.
• Claim protocols also serve as an outline
for the insurer’s global team to recognize,
and appropriately respond to, the losses
of an insured that might occur in another
country or region of the world.
The majority of cargo theft or accidental damage losses occur during the final two or three days of the transportation, rather than at sea.
Vulnerabilities: The final leg of the journeyThe majority of cargo theft or accidental
damage losses occur during the final two or
three days of the transportation, rather than
at sea. When cargo is onboard a ship it is
easier to protect, but after it has been
unloaded at the port, and the final
distribution by road or rail begins, it becomes
much more vulnerable. Of course, there can
be damage to cargo at sea, or there can be
a vessel casualty, but once it gets onto the
roads or rail, the cargo is more susceptible to
loss and / or damage from theft or damage
incidents during transportation.
Infrastructure deficienciesThe nature of the infrastructure in some
territories is a major concern when it comes
to inland transit. Inland transit in Mexico,
China and especially India can sometimes be
problematic, particularly away from ports
and large cities. In some territories, the
quality of warehousing is poor, secure
parking for trucks is non-existent, road
quality is inferior, intermediate storage
conditions are weak and there can be
banditry in remote areas.
In India, the infrastructure is not up to speed,
and the quality of roads, bridges and tunnels
is questionable. China is investing heavily in
infrastructure, so improvements away from
large ports and in the south of the country
will help the transportation of cargo as
growth continues.
Customer checklist: Helping protect cargo on the road
• Ensure that secure parking is used where available.
• Install tracking devices and have a plan to intervene, if necessary.
• Improve container security.
• Secure online cargo tracking facilities.
• Check routes in advance and identify alternatives.
• Train employees in handling and packing of cargo.
• Know your logistics provider and review freight contracts regularly.
13
General averageGeneral average is a global maritime industry loss mitigation convention whereby ship owners and cargo interests
proportionately contribute to fully reimburse those in the venture who sustained loss or damage in preventing
the total loss of a vessel, crew and its cargo. undamaged interests must confi rm their contribution by way of a
fi nancial guarantee before their cargo or interest is released while their fi nal contribution is calculated,
Sometimes years later.
General average losses require the coordination of both local and global marine claim professionals. Marine
claim experts locally must manage the loss and interact with local authorities while global resources
assist in arranging the fi nancial guarantee security and communicating with the various interests
involved in the venture.
Increase in general averagesA noticeable trend at the moment is the declaration of many more general average claims.
The majority of these events are the result of engine failures and mechanical breakdown of
the vessel. This is, in part, directly attributable to the lay-up of the world fl eet during the
economic downturn.
Of course, this depends on the carrier, and some are much better at maintaining their
fl eets than others. But the laying-up of the world fl eet has been a big contributor to
the number of general averages that have exploded onto the marine cargo market in
the last two years, in comparison to the number of general averages that were
declared in the previous fi ve-to-seven years. General average was more rare in the
mid-2000s, because with robust freight rates it made more sense to keep the vessels
running and properly maintained.
However, when they are laid up, vessels are often poorly maintained, or not maintained
at all. When the economy starts to recover, these vessels are brought back into service
without any major refi ts or signifi cant maintenance having been carried out, resulting
in an increase in breakdowns and fi res.
Declaring generalaverage
14
15
insig
hts 11
1515
insig
hts 11
CaSeSTuDy
Whereismycargo?A common problem can be securing the timely
release of cargo, especially where the goods are perishable. A classic scenario would be
an insured purchasing an entire ship load of perishable goods. During departure, the
vessel is grounded by heavy weather. The insured would be notified that their cargo
had been delayed by the event and would not be delivered on schedule. In order to
have their cargo released for delivery to the final destination on board on another
vessel, they would have to agree to pay significant additional money to the vessel
owners for their contribution toward the damage sustained in the incident to the vessel
and cargo under General Average.
General Average Guarantee In such a situation, Zurich marine claims teams would co-ordinate their activity in its
various offices worldwide to engage the vessel owners, and agree to post a General
Average guarantee for the sum required to allow the goods to be released. Zurich’s
claims teams could assist in arranging for the trans-shipment of the cargo from the
damaged vessel to a new vessel.
The cargo could be delivered with no damage sustained. The goods could then
subsequently be sold in the local market and the insured would be able to continue
conducting business with no out-of-pocket expenses. The insured would see minimal
disruption to their operations and would have met their obligations to their customers.
Global experienceIn such a case, little could have been done to avoid the situation and in the end, there
may be no damage sustained to the insured cargo. By selecting a global insurer with
local marine claim expertise, the financial obligations of the insured can be met and the
cargo delivered, with Zurich managing the claim to the advantage of both companies.
16
Salvage guarantees Salvage security posted by cargo owners is driven by an
arbitration board in London under the Lloyd’s open form
salvage contract. In that arbitration process, only certain
underwriters’ guarantees are recognized, primarily
underwriters in London with strong fi nancials. A local insurer
in Malaysia might have diffi culty being able to post its own
security, and may have to buy a bond or other fi nancial
instrument to post security for salvage, which would be
charged back, and become part of the cargo claim.
Recognized guarantees mean fewer delaysThe fi nancial security and salvage guarantees issued by
multinational insurers are recognized by the salvage arbitration
group in London directly. It can be issued quickly, is accepted
immediately, and the cargo can be released much faster for
delivery on to its fi nal destination. until an acceptable
guarantee is posted, whether it is for general average or for
salvage security, the cargo will not be released. A centralized
global process for the review and vetting of salvage security
affords insureds the opportunity to have guarantees issued
promptly on their behalf for the quick release of their cargo.
Salvage–postingsecurity
indirect costs for customers due to delays in the release of cargo• Cancellation of the customer’s contract or purchase order for failure to meet the delivery schedule.
• Cancellation of future orders from the customer and adverse selection to an alternative supplier resulting in future revenue declines.
• Cancellation or reduction in orders from other customers arising from industry knowledge of the delays experienced.
• Interruption of the manufacturing fl ow to replace the goods if there is an extended delay.
insig
hts 11
17
Another example of the sort of problems encountered
by insureds concerns issues with containers and
packaging. A typical scenario could involve retail industry.
A line of clothing that is manufactured in Asia needs to
be shipped directly to a european buyer just in time for
its seasonal release.
However, it would only take a fresh water leak from a
hole in one of the sea containers carrying a part of the
shipment of clothing during the course of transit, to
cause a humidity condition within the container. While
the clothing would not directly be damaged by the
water, the moisture would allow a mildew odor to affect
that part of the shipment.
Shipment rendered un-saleable When delivered to the distribution centre, the clothes,
while physically undamaged, would have a smell that
would deter any would-be buyer, also affecting the other
clothes on the store shelves. It might be that not all the
clothes would be affected, perhaps only particular sizes,
but the clothes would be rendered un-saleable. The
result would be that the entire clothing line, and its
launch, could be threatened.
Risk mitigation Such a problem can be avoided by a simple loss
prevention measure. Having a container inspection
program put in place by the supplier, the hole in the
container could be identified before the container is
loaded with the cargo for shipment to europe, and
the entire loss could be avoided.
Inspection programs of containers and packaging is
a simple yet vital risk mitigation measure that may
remove or reduce potentially devastating, and yet
avoidable, losses.
The solution In such a situation, the Zurich Marine claims team,
in conjunction with local appointed experts, would
implement an action plan that utilized a cutting edge
ozone treatment process to eliminate the mildew odor
and recondition the clothing, making it once again
saleable by the european buyer or distributor.
This solution would not only have reclaimed the affected
clothing, but also prevented a larger issue for the
insured. The entire order could have been cancelled due
to damage to a portion of it, and may have jeopardized
the overall relationship between the designer and retailer
had the clothing line not been available for sale at the
outset of the new season.
CaSeSTuDy
There’saholeinmycontainer!
18
Obligations ininternationaltrade
insig
hts 11
until recently, the latest version of the terms
was from 2000. However, a new version has
been released, as of january 1, 2011, known
as Incoterms 2010.
What are Incoterms?The Incoterms are delivery terms for the
national and international merchandise trade.
They are obligations of a national and
international purchase contract between
buyer and seller and, amongst other things,
clarify the questions:
• Who pays the transport cost to where?
• Where is the risk transfer, i.e. who
assumes the risk, and when, in the event
of damage or loss?
• Who must take out transport insurance
to where?
• Who is responsible for export and
import clearance?
Incoterms 2010As a result of the new Incoterms, customers
should be aware that:
• the Incoterms must be explicitly agreed
upon between buyer and seller with
reference to Incoterms 2010
• they may not contradict themselves in
the purchase contract
• they can now also be used for
domestic business
• the destination location, destination port
and destination terminal must be specified
more precisely than in Incoterms 2000.
The ICC stresses that all contracts made
under Incoterms 2000 remain valid after
2011. The ICC says that it recommends using
Incoterms 2010 after 2011, but parties to a
contract for the sale of goods can agree to
choose any version of the Incoterms rules
after 2011. However, it is important to clearly
specify the chosen version.
Since 1936, the International Chamber of Commerce (ICC) in Paris has published the Incoterms® or an international, uniform regulation of essential buyer and seller obligations. They are used in offers, contracts, order confirmations, orders, conditions of purchase and sale, and Letters of Credit.
It is also important to remember that the
Incoterms do not regulate:
• transfer of ownership, notification
of defects
• inability to deliver
• handling of payments
• legal venue
• and applicable law.
The Incoterms are neither common law nor
commercial usage.
For more information on incoterms 2010 visit: http://www.iccwbo.org/incoterms
19
And it is estimated by the International union
of Marine Insurance (IuMI) that 60% of marine
claims losses during transit are caused by
inappropriate handling, packaging and/or
securing of goods.*
Frequency losses from rough handlingZurich became aware that something needed to
be done about the issue of correct handling of
goods in transit as a result of its work with a
major customer a couple of years ago.
In the course of a claims analysis study, Zurich
discovered that the main problem was not major
damage to cargo but more a question of
frequency losses. And the majority of these losses
Transportyourgoodssafely,ontimeandwithoutlosses
Cargo handling has always been an issue, but in recent years it has become a major concern. It is easy to see why – according to research by the Swiss Federal Institute of Technology*, a third of all deliveries are damaged or delayed.
20
insig
hts 11
21
The solution: an e-learning platform / blended learningZurich’s answer is to launch the Zurich Cargo Risk Academy,** a simple online
tool offering employees training on cargo handling, organized into different
modules. For example, there is a module on handling dangerous goods,
another on packaging, as well as international trade regulations and terms.
Zurich customers can benefi t from these complimentary courses, which are
accessible anywhere in the world.
Where more detailed or specialized knowledge is required, a blended
learning system is being developed which also involves face-to-face training.
The training focuses on:
• employee and asset protection
• compliance with legal and regulatory requirements
• how to reduce frequency losses
• how to maintain business continuity
• how to manage costs of risks
• balance sheet protection
• sharing of knowledge and best practice.
Overall, the Zurich Cargo Risk Academy aims to help global corporations
reduce their frequency losses in this area, and to comply with their duty of
employee education in a cost-effective, geographically independent way.
TolearnmoreabouttheZurichCargoRiskacademyvisitwww.zurichcargoriskacademy.com
*Swiss Federal Institute of Technology Zurich, university of St. Gallen, 2010.
**Planned launch in selected european countries is August 1, 2011.
were caused by rough or inappropriate handling,
problems with packaging and securing of goods, wrong
handling of commodities, or the wrong choice of
container. Although the average loss was only around
uSD 22,000, frequency was the problem.
Lack of trainingFurther analysis revealed that many of the workers
lacked basic knowledge about the correct handling of
goods and had very little or no training. Zurich found
that in the transport sector generally there was very
little attention paid to training and tuition of employees.
Training opportunities in the open market were either
unavailable, unsatisfactory or too expensive.
Zurich saw that the training issue needed to be addressed
and created a multi-lingual tool for Zurich customers to
provide online training on correct cargo handling, from
choosing the right packaging and the right container to
loss prevention advice for cargo handlers.
An industry problemIt soon became clear when Zurich looked at other
customers that rough handling was a major problem for
the sector as a whole, largely driven by cost factors and
a lack of training options. Zurich saw an opportunity to
help customers by providing a global tool to share best
practices in cargo handling.
ZuRICH CARGO risk aCaDemY
The purpose of the Forum is ‘to reach a better understanding of the
reasons that lead to the application of poor practices in packing of
containers that result in industrial accidents as well as to reach
consensus on a common approach throughout the supply chain
for the correct application and enforcement of the appropriate
standards for packing containers.’
6http://www.ilo.org/public/english/dialogue/sector/techmeet/gdfpc11/gdfpc-consensus.pdf
ensuringsafetyinthe
packagingofcontainers
earlier this year, 83 government, employer and worker representatives met at the Global Dialogue Forum on Safety in the Supply Chain in Relation to Packing of Containers2, organized by the International Labour Organization.
Points of consensusThe Forum adopted a set of ‘Points of Consensus’, which included the following:
• Many accidents and problems in the transport sector are attributed to poor practices in relation to packing of containers, including overloading or misdeclaration of contents.
• Lack of training and knowledge of available standards is a signifi cant reason amongst others for poor practices in the packing of containers.
• Inadequate dissemination of existing standards and guidance, and lack of awareness of this information, not only among workers and their employers, but other stakeholders and authorities, such as police, occupational safety and health (OSH) inspectors, OSH doctors, etc.
• In many cases, there is a lack of development of appropriate plans for the consolidation, distribution, segregation and securing of cargo in containers.
22
insig
hts 11
23
• Suitable risk assessments are not always carried out in the supply chain so that the levels of risks would be identifi ed, and particular problems would be targeted.
• Those responsible for packing containers are not reached by the existing guidance on good practices for packing containers.
• There is a need for a system for the inspection of containers for proper packing at the point of origin.
• Misdeclaration and the lack of adequate information on container contents and weight.
• Different consignments are packed in the same container and unpacked without the appropriate planning and coordination.
• It is agreed that safety in the supply chain can be improved by implementing good practice through international standards on the packing of containers.
• It is agreed that an IMO–ILO–UNECE* code of practice on the packing of cargo transport units (CTUs) is necessary. The three organizations are requested to proceed with the revision of the existing guidelines for packing of CTUs which would form the code of practice.
• Awareness of and training on consistent standards for the whole supply chain are necessary.
• It is important to ensure that training is more focused and simple.
• Once the code of practice emanating from the revised IMO–ILO–UNECE guidelines for packing CTUs is adopted, it will be important to ensure it is followed up with user-friendly publications (training material, tool kits, etc.) and that the code, and the accompanying publications, are made free and easily accessible and are widely disseminated.
• There is a need to improve the collection and publication of data on accidents related to the improper packing of containers. In this regard, consideration should be given to reviewing the standard classifi cation of accidents in order to identify road and other accidents that are related to improper packing of containers.
* International Maritime organization (IMO)International Labour Organization (ILO)united nations economic Commission for europe (uneCe)
24
Riskengineering:greaterpeaceofmind
Everyone knows that prevention is better than cure, or indeed, that risk mitigation is better than having a claim.
24
25
insig
hts 11
But this is even more true in a world where
just-in-time delivery and time-sensitive
projects have dramatically increased the
cost of business interruption or delay. In a
time of cost-cutting and belt-tightening,
risk engineering can often be seen as an
additional expense, but the value of reducing
losses and interruptions can far outweigh
the cost.
now is the time for risk engineeringIt can be argued that a period of economic
downturn is exactly the time that companies
should be investing in loss mitigation. In
diffi cult times, companies simply cannot
afford losses and the delays they can entail,
and when margins are tight, they may not
have the fi nancial strength to cope with
losses and lost customers. Risk prioritization
is essential in order to optimize the value
from the risk management budget.
Risk engineering can be particularly
important for companies that are starting
to expand and to export their products.
As companies enter new markets, such as
Brazil, Russia, India and China, it is vital that
they have access to as much information as
possible beforehand so they are aware of
the risks they may face.
Re-routing to avoid delayFor example, a Zurich customer required information
about the transport of automotive products to
Russia. With just-in-time processes, any delay would
have been very expensive for the company. Risk
engineers were able to offer four alternative routes,
with a risk grading for each route, allowing the
client to balance the various alternatives with the
customer’s transport cost estimates.
Customer risk engineering checklistHas a risk analysis been carried out?
Where are losses occurring?
Why are losses occurring?
Is the bigger picture being looked at, especially with regard to supply chain interruption? Have interdependencies been mapped?
Is there a mitigation plan in place?
Is the mitigation plan being effectively communicated to all employees?
Is there regular monitoring of the effectiveness of loss prevention measures?
Is the data relating to loss prevention being collected?
Is there an effective system of risk reporting?
Are costs of risks and cost benefi t analyses being carried out?
Is the human element being taken into account?
Is there a global risk management program in place, including an effective multinational insurance program?
...the value of reducing losses and interruptions can far outweigh the cost...
25
>
26
Loss trends and patternsClaims professionals see the loss trends and
developments:
• How thefts are being carried out.
• Which transportation routes are higher risk.
• Which transportation companies are security minded.
• Which companies have a higher theft incident record.
An insured had a loss trend of water damage to their products originating out
of Indonesia. The trend was identified by the marine claims adjuster who handled
the losses as they were discovered upon delivery of the product in the uS.
The underwriter was advised of the loss trend, and contacted the marine risk
engineering department who then arranged for an inspection of cargo loading
and shipping procedures at the insured’s supplier in Indonesia.
The risk engineer determined that the supplier did not conduct an inspection
of the containers when they were received for the loading of the insured’s
cargo. Such an inspection would have identified deficiencies in the container.
By implementing a container quality check before loading the insured’s goods
for transit to the uS, future similar losses could be prevented or reduced.
Further, the claims and underwriting team were able to advise the insured on
improving its freight contracts with the carrier and increasing the carrier’s liability
if damage occurred to the insured’s cargo as a result of the carrier’s negligence.
Casestudy:Waterdamagetogoods
This information on local loss development
patterns can be collected and passed to the
risk engineering teams who can then share
them with customers to help develop
economically viable, tailor-made solutions.
These might include:
• alternative transportation providers
or routes
• the implementation of dedicated routing
• the use of pre-planned and secure
rest stops.
26
>
insig
hts 11
27
Common-sense loss preventionThere are many areas where risk engineering
can make a difference, including security,
employee training, routing options, packing
improvements and cargo handling. Some risk
engineering measures can be simple and
inexpensive, but can make a huge difference.
And while some may be technical or
innovative, others may be more about
common sense.
A claim paid by Zurich involved a turbine
being transported from Berne, Switzerland to
Chicago, Illinois. The fi rst part of the trip was
managed with the help of a special fl at-bed
trailer. However, the route had not been
checked before the shipment, and at the
entrance to a tunnel, the driver of the
4.20 meter high rig failed to notice the
sign saying the maximum vehicle height is
3.80 meters. needless to say, the turbine
was heavily damaged as the truck crashed
into the tunnel. Checking routes is an
essential and basic part of loss mitigation.
A claim paid by Zurich involved a shipment
of clothing that was on its way by road
from Rotterdam, netherlands, to Zurich,
Switzerland. A storm broke out with
torrential rain, and because the truck driver
had forgotten to properly tie down the
tarpaulin, the cardboard boxes were soaked
by rain and road spray, causing water
damage to the clothing. Human error is a
major loss factor that can be mitigated
through proper training and monitoring.
The human elementIt is important to remember that the human
element is crucial to risk engineering systems
and devices are useful, but it is often the
human element that can have the biggest
impact on mitigating risk. Training is
invaluable for increasing employee
awareness, so that they become involved
and part of the solution.
Risk engineering is not just about preventing
and mitigating losses and reducing potential
disruptions to operations, but is increasingly
about providing the correct risk analysis
methods. These can then enable the
understanding and reduction of the total
cost of risk, as well as prioritizing risk
improvements and enabling informed
decisions around optimizing future capital
expenditures and tracking and measuring
risk improvements.
...systems and devices are useful, but it is often the human element that can have the biggest impact on mitigating risk.
27
28
Infrastructure projects are becoming attractive again to
investors as people look to get some sort of return for
their money, with the recent focus on power plants and
refineries, both oil and chemical.
The project challenge: On time and on scheduleThe big challenge associated with large-scale infrastructure,
power plant and industrial projects is bringing assets online
and on schedule, and so the management of the marine
and transit risks becomes crucial. Moving oversize,
expensive, ‘one off’ or bespoke shipments into extremely
complex settings, markets and jurisdictions is a challenge.
It is even more of a challenge to ensure that this is done
on schedule.
Projects:
thewayaheadinfrastructure projects are beginning to see growth again after a quiet period. From the middle of last year, there has been a noticeable increase in such projects, especially in the Middle east, north Africa, the uS and Asia.
29
insig
hts 11
insig
hts 11
The benefi ts of integrated teams for customers
A single point of contact for the customer.
Claims are dealt with quickly and effi ciently so that supply chains aren’t interrupted and projects aren’t delayed.
The ability to share information: claims information is vital for risk engineering to identify where problems lie and how mitigation measures can be best applied.
Ensure that claims protocols are in place from the start.
Underwriting can refl ect the risk engineering efforts of the customer.
Improved policy terms and recovery prospects.
For large projects like this, it makes sense to
have a global insurer involved that can provide
coverage running across different insurance
lines, such as DSu, marine and construction.
Integrated teamsThe insurer’s job is, of course, to provide risk
transfer, to identify and manage risks, and to
provide global claims services. This requires
not only an insurer with a global presence,
but also one where underwriters, risk
engineers and claims specialists all work
together as an integrated team. Only a
handful of insurers in the marine sector have
dedicated marine risk engineering personnel
– most of them use surveyors.
Marine underwriting, claims and risk
engineering teams cannot operate in isolation
and should work closely together as a unit, not
separate entities. This can lead to an effi cient
workfl ow and relevant risk improvements.
The value of such integrated teams is
particularly important when the insurance
requirements of a project involve a range of
risks in different geographic locations.
Delay in start-upMany infrastructure projects involve the
transportation of key components, and any
delay in their arrival can have major cost
implications. Insurance plays a key role here,
ensuring that if there is a problem, claims
can be resolved quickly and effi ciently, thus
minimizing delays. Marine Delay in Start-up
(DSu) cover, a form of business interruption,
is increasingly in demand from project
owners/investors, and is also a requirement
from many lenders where the project relies
on fi nance.
Seamless coverLarge infrastructure projects often involve
a range of insurable risks. There may be a
supply element, a property element, a
marine transit element, business interruption,
construction all risks cover, and then initial
start-up and operation. Increasingly
companies are looking for seamless cover,
providing protection from the earliest stages
of the project through completion.
Moving oversize, expensive, ‘one off’ or bespoke shipments into extremely complex settings, markets and jurisdictions is a challenge.
29
>
A key component was a new chemical
reactor that was manufactured by MAn
DWe in Germany, also a Zurich customer.
The reactor had been built at MAn DWe’s
factory in Deggendorf, Germany, and was to
be transported 600 kilometers, by water and
road, to the Sasol Solvents Site in Moers also
in Germany. The two-week trip was not a
typical, everyday transportation of goods.
The reactor had a diameter of nine meters, a
height of eight meters, and weighed 570 tons
– which is equivalent to 350 saloon cars!
Delivering a key componentThe challenge was not only to ensure that
there was no damage to the reactor, but that
it arrived at the plant on time. The reactor
was a key component and without it the
new capacity would be unable to begin
production, representing a major business
interruption and putting Sasol-Huntsman’s
significant investment at risk.
Considerable risksThe risks were considerable – the loading
and unloading procedures were particularly
critical due to the enormous weight of the
reactor. Risks during the transportation
included possible damage to the reactor, or
even a total loss. Time delays during the trip
would cause the customer to suffer potential
production losses and if the reactor were
totally destroyed, the production of another
reactor would take another two years. Zurich
provided erection All Risk, Marine Transit,
and Delay in Start up cover for the project,
as well as risk engineering advice for the
transportation of the reactor.
Successful transportationThe transportation comprised a 600-kilometer
trip via various rivers including the Danube,
the Main-Danube Canal, the Main, the Rhine,
and then, after a two-week trip, it was loaded
onto a truck to be taken to the Moers plant
with a police escort. The reactor arrived safely,
undamaged and on time, and the new
capacity remained on schedule to start
production on time.
See the video and full story on
http://www.zurich.com/globalmarine/
The Sasol-Huntsman project
One of the leading chemical maleic anhydride producers in europe, sasol-Huntsman, expanded their production capacity in order to meet growing demand for their products.
The risks were considerable – the loading and unloading procedures were particularly critical due to the enormous weight of the reactor.
Projects:thewayahead
30
>
31
insig
hts 11
insig
hts 11
The un Secretary General Ban Ki-moon, spoke earlier this year
at the launch of the World Maritime Day, where the theme for
2011 was: ‘Piracy: Orchestrating the Response’1. Ki-moon said:
“Piracy seems to be outpacing the efforts of the international community to stem it… Despite the deployment of signifi cant naval assets to the region, the number of hijackings and victims has risen signifi cantly. more needs to be done.”
7http://www.un.org/news/Press/docs/2011/sgsm13386.doc.htm
Piracy:
notgoingawayDespite increased attention from governments, global organizations and the maritime sector, piracy continues to be a major problem.
31
>
The nature of the problemThe statistics reveal the scale of the problem. More people were
taken hostage at sea in 2010 than in any year on record, according
to the latest global piracy report from the International Chamber
of Commerce (ICC) International Maritime Bureau (IMB). Pirates
captured 1,181 seafarers and killed eight. A total of 53 ships
were hijacked.
The number of pirate attacks against ships has risen every year for
the last four years, the IMB revealed. Ships reported 445 attacks in
2010, up 10% from 2009. While 188 crew members were taken
hostage in 2006, 1,050 were taken in 2009 and 1,181 in 2010.
According to the IMB, hijackings off the coast of Somalia accounted
for 92% of all ship seizures last year with 49 vessels hijacked and
1,016 crew members taken hostage. A total of 28 vessels and 638
hostages were still being held for ransom by Somali pirates as of
31 December 2010.
32
>
33
insig
hts 11
Somalia – no signs of improvementAccording to specialist intelligence company exclusive
Analysis, there has been no improvement in the number of
hijacked vessels being taken by Somali pirates: ‘The shore
situation in Somalia has made little difference to the ability
of pirates to carry out their work with impunity. The
number of ships held has increased dramatically in the last
year – they are also being kept for longer before ransoms
are paid.’
The company said that the last year has seen attacks
across the whole Somali Basin and Arabian Sea but
concentrating in the Arabian Sea for the last three months.
“We expect to see more attacks and hijacks off Tanzania
and Kenya in the coming months with some activity into
the Mozambique Channel,” it adds.
Method of attackThere has been little change in the method of piracy
attack, using a mother ship as a base and then sending
out fast skiffs with fi ve or six pirates armed with AK-47,
rocket propelled grenades and long ladders for scaling the
ship’s side.
According to exclusive Analysis, the use of mother ships is
not new, but the size and quantity has increased – they
give range and sustainability to the pirates for some weeks
and the ability to carry many pirates in order to carry out
multiple attacks. exclusive Analysis has seen up to 60 on
one mother ship.
insig
hts 11
Piracy hits all-time highPiracy at sea hit an all-time high in the fi rst three months of 2011,
with 142 attacks worldwide, according to the International Chamber
of Commerce (ICC) International Maritime Bureau’s (IMB) global
piracy report. The increase was driven by a surge in piracy off the
coast of Somalia, where 97 attacks were recorded in the fi rst quarter
of 2011, up from 35 in the same period last year.
Worldwide in the fi rst quarter of 2011, 18 vessels were hijacked,
344 crew members were taken hostage, and six were kidnapped.
A further 45 vessels were boarded, and 45 more reported being
fi red upon. In the fi rst three months of 2011, pirates killed seven
crew members and injured 34.
Of the 18 ships hijacked worldwide in the fi rst three months of the
year, 15 were captured off the east coast of Somalia, in and around
the Arabian Sea and one in the Gulf of Aden. IMB fi gures showed
that Somali pirates were holding captive 596 crew members on
28 ships as at the end of March 2011.
nine incidents were reported off Malaysia in the fi rst quarter of
2011, with fi ve incidents recorded for nigeria.
Of the 18 ships hijacked worldwide in the fi rst three months of the year, 15 were captured off the east coast of Somalia...
33
>
Ships held for longerThe average length of time that ships are held for has been steadily
increasing over the last year – around 120 days at the moment, some
longer, some shorter – depending on the owner’s response to the
ransom demands, says exclusive Analysis. On the issue of the pirates’
attitude to cargo, exclusive Analysis says they have seen little
evidence of cargo being used, looted or transshipped in any
signifi cant quantities: ‘The bulker, tankers and container vessels
cannot have their cargo removed. The pirates have no ports or
capability to do so. normally the cargo will be part of the deal –
in most instances it can’t be moved anyway, although perishable
goods will be lost.’
Defensive measuresWhat are the most successful, cost-effective defensive measures that
can be taken by ship owners to deter attacks? exclusive Analysis lists
them in order of success:
• Armed guards
• A ship that can do more than 20 knots
• Razor wire
• An alert crew
34
>
insig
hts 11
35
insig
hts 11
the uK and President Obama’s executive Order Concerning
Somalia of 13 April 2010. The former makes it illegal to pay
money, directly or indirectly, if it is known or reasonably
suspected that it may be used for terrorism. The latter prevents
uS persons, and the defi nition of a uS person is wide, from
making payments to certain persons, essentially specifi ed
terrorists and those determined to be engaged in acts
threatening the stability of Somalia.”
He adds, “We fi nd that it pays off to have a close liaison with
the relevant authorities involved in policing those provisions –
the Serious Organized Crime Agency in the uK, and the Offi ce
of Foreign Assets Control in the uS – when dealing with
situations involving the payment of ransom to pirates, so as
to ensure that the payments are duly authorized and legal.”
Tackling the root problemIn the longer term, any solution needs to move beyond
deterrence efforts and tackle the issue in Somalia itself. un
Secretary General Ban Ki-moon explained: “We need to support
alternative livelihoods and the rehabilitation of coastal fi sheries.
We need to develop Somali capacity to deal with piracy-related
activities on land and in its territorial sea. This must be linked to
the broader efforts to develop Somalia’s police and coast guard,
as well as its justice sector, to ensure that persons suspected of
acts of piracy are prosecuted.”
Of course, it is not just the seas around Somalia that are subject
to piracy. exclusive Analysis points to the west coast of Africa in
the area of nigeria and neighbouring countries, as well as
Bangladesh, the South China Sea and Indonesia, and anchorages
off Singapore.
There is some positive news, however, that highlights how
international efforts are beginning to successfully tackle the
problem of piracy. The IMB said in its report that while attacks
off the coast of Somalia remain high, the number of incidents
in the Gulf of Aden reduced by more than half last year, with
53 attacks in 2010 down from 117 in 2009.
According to exclusive Analysis, having armed guards on vessels
undoubtedly deters hijackers. Indeed, no ships with armed guards
have been captured. As to the impact of naval forces and other
moves by the international community, exclusive Analysis says that
they are able to keep a steady state: “Without them the picture
would be considerably worse. The ocean area is just too large to be
everywhere at once. Too many ships that are hijacked have taken
few measures to protect themselves adequately in the hope the
navy will protect them. This is a dangerous attitude.”
Regulatory issuesWhen it comes to the payment of ransoms, there is a regulatory
element that has to be considered. Christopher Dunn, Managing
Partner, Waltons & Morse explains: “In the marine fi eld, and
particularly in the uK and the uS, the main regulatory issue is ransom
payments to pirates, given that pirates are criminals and may be linked
to terrorists, although the April 2010 uK House of Lords Select
Committee Report ‘Operation Atlanta’ indicates that there is
no evidence of such a link to Al shabab despite a confl ation in
some quarters.”
According to Mr. Dunn, a specialist marine insurance practitioner, “
of particular relevance are section 15 of the Terrorism Act 2000 in
35
36
The aim of the Centre is to participate in and
contribute to the growth and development
of Shanghai as an international finance
centre and global shipping hub by 2020.
The Centre will also provide benefits for
Zurich customers through its focus on
studying and forecasting new developments
and trends in the fields of global shipping
and financial industries.
The research projectsZurich has brought together some well-
known specialists in shipping and finance
from foreign and domestic academic
institutions, working closely with the Chinese
ZurichInternationalResearchandDevelopmentCentreofShippingandFinance
The Zurich Research and Development Centre (R&D Centre), based in Shanghai, China, has now been in operation for more than a year, having been officially inaugurated in March 2010.
insig
hts 11
government. In the last year, the Zurich R&D
Centre has successfully completed ten
research projects, which were led by eight
research teams.
The projects included a report on liability
insurance for shipping agencies and the
development of shipping insurance in
Pudong, China, produced by Professor Wang
Xuefeng, the Dean of the International
Shipping School, Shanghai Maritime
university, as well as marine insurance
studies by Patrick Donner, Associate
Academic Dean of World Maritime
university. Other projects covered topics
such as the development of shipping-related
derivatives markets in Shanghai, and aircraft
and ship-related fi nancing.
Policy referencesThe projects have been taken by the
government as policy references, and
the recommendations made are being
adopted to roll out new policies and
innovative reforms about market access,
shipping-fi nance and tax incentives.
james Liu, Senior Project Manager at
the Zurich International Shipping and
Finance R&D Centre, says that the
recommendations to support the
development and upgrading of shipping
agencies’ liability insurance products
will provide better risk protection to
customers, and the recommendation to
develop shipping industry funds in
Shanghai will benefi t ship fi nancing,
building and maintenance businesses.
37
Future projectsLooking ahead to the second year of
operation, the Centre is undertaking a
number of new projects that will
benefi t customers. In particular, james
Liu points to a study on port risk
management and insurance solutions
that he believes will benefi t customers
by giving them a better tool to
analyze and address the risks in
operating the port facilities including
piers, docks, warehouses, and also
provide new business opportunities to
logistics companies and freight-
forward companies.
He also points to research on current
market access benchmarks for foreign
service providers, which he says will
provide new policy advice to the
government to remove unnecessary
barriers for foreign fi nancial and
shipping services companies to enter
the markets of Shanghai.
38
Contributors
sean Dalton Senior Vice President, Head of Marine, uS
mike Davies Chief underwriting Officer Marine, Asia Pacific
steve Gillen Head of General Insurance Marine Claims
Howard kingston General Insurance underwriting Manager Marine
Oliver Daniel Lopez Senior Risk engineer, Switzerland
insig
hts 11
39
For more information, please contact your broker or your Zurich contact. Alternatively, visit: http://www.zurich.com/globalmarine
1329
05A
01 (
05/1
1) Z
CA
The information in this publication was compiled from sources believed to be reliable and is provided for informational purposes only. All sample policies and procedures herein may serve as a guideline, which you can use to create your own policies and procedures. We trust that you will customize these samples to reflect your own operations and believe that these samples may serve as a helpful platform for this endeavor. Any and all information contained herein is not intended to constitute legal advice and accordingly, you should consult with your own counsel when developing policies and procedures. We do not guarantee the accuracy of this information or any results and further assume no liability in connection with this publication and the sample policies and procedures, including any information, methods or safety suggestions, contained herein. Moreover, Zurich reminds you that this cannot be assumed to contain every acceptable safety and compliance procedure or that additional procedures might not be appropriate under the circumstances. This is also intended as a general description of certain types of insurance and services available to qualified customers through the companies of the Zurich Financial Services Group, including, in the united States, Zurich American Insurance Company, Zurich Towers, 1400 American Lane, Schaumburg, Illinois 60196; in Canada, Zurich Insurance Company Ltd, Canadian Branch, 400 university Avenue, Toronto, Ontario M5G 1S7; and outside the u.S.A and Canada, Zurich Insurance Plc, Ballsbridge Park, Dublin 4, Ireland; Zurich Insurance Company Ltd, Mythenquai 2, 8002 Zurich, Switzerland; Zurich Australian Insurance Limited, 5 Blue Street, north Sydney, nSW 2060, Australia and other legal entities, as may be required by local law. Your policy is the contract that specifically and fully describes your coverage. The description of the policy provisions contained herein gives a broad overview of coverages and does not revise or amend the policy. Certain coverages are not available in all jurisdictions. You are in the best position to understand your business and your organization and to take steps to minimize risk, and we wish to assist you by providing the information and tools to help you assess your changing risk environment. In the united States, risk engineering services are provided by The Zurich Services Corporation.
www.zurich.com