Archive for Freight Insurance

Marine Insurance Counts the Cost of Increased Attacks by Pirates!

Unbelievably Marine Piracy continued to grow in 2009, which should be a sobering thought for all us sea dogs who like to roam the seven seas.

The ICC International Maritime Bureau’s Piracy Reporting Centre (IMB PRC) has just released it’s 2009 annual report and it makes bleak reading for insurance loss adjusters and marine insurance actuaries trying to set rates for 2010.

Piracy and armed robbery incidents topped 400 in 2009.

Incredibly in these days of satellite surveillance and Type 45 Destroyers,  incidents of Marine Piracy have grown from 239 in 2006 to 406 in 2009.

The total number of incidents attributed to the Somali pirates stands at 217 with 47 vessels hijacked and 867 crew members taken hostage.

Somalia accounts for more than half of the 2009 figures, with the attacks continuing to remain opportunistic in nature, with small high speed outboard land based vessels being used to pick off a certain type of easy target.

So what precautions against pirates are being taken?

All shipping and vessels in the gulf are required to transit the Somali coast in convoy with a minimum speed of 10 knots with absolutely no stops or slowing.

It is recommended to protect the boat with razor wire around the freeboard or the the lowest area of the deck.
Greased or electrified handrails have been used although the vessel owners are encouraged to use non-lethal deterrents to prevent the situations escalating.

Vessels that regularly transit the area even resort to welding doors shut and welding metal plates across windows. The return of the Iron Clads!

It’s quite obvious that America doesn’t want to get involved in the region after the Blackhawk incident, however it’s Insurance Blogger opinion that until very stern measures are taken against the major perpetrators, these attacks will continue and continue; and the cost of freight insurance and boat insurance will rise and rise……

Meanwhile……..

British Hostages Paul and Rachel Chandler, taken by Somalia Pirates, are spending their 159th day in captivity!

Hey Gordon Brown!

How about this for some political capital this Easter…….

NEWS FLASH!!!

We interrupt the Snooker final for a message from Prime Minister Gordon Brown..

” It is with great pleasure that I have to tell you that this morning a team of our finest Royal Marine Commandos, successfully carried out a mission to rescue Mr and Mrs Chandler. There were no British Casualties……”

Freight Forwarder Insurance – Cruel twist of freight as FSA pulls back.

After four long years the British International Freight Association (BIFA) has succeeded in its campaign to see freight forwarders once again given the ability to provide insurance to their customers.
Treasury officials confirmed this month that the Insurance Mediation Directive (IMD) Exemption is now in effect for freight forwarders meaning that they should be able to obtain an open cover freight forwarders insurance policy once again without the having to go through the lengthy and cumbersome Financial Services Authority (FSA) registration.
Introduced in January 2005, the Insurance Mediation Directive meant that many freight forwarding companies began to withdraw offers of provisions of insurance to their customers. With the recent exemption in place many of these are expected to now resume offering these services again.

Controversley however, those freight forwarders who have already gained there license from the FSA will continue to be authorised by the body and are still fully liable for fees unless they were able to cancel their authorisation via the FSA website in the six week timeframe that was given.

freight forwarders insurance cover

The exemption also initially only applies to the actual provision of insurance for existing commercial customers. In particular the exemption is not applicable where a freight forwarder or a storage company conducts business with a private individual. In this instance registration with the FSA is still required for the business to be legitimately authorised.
In relation to the success of the campaign, Colin Baumont, BIFA Director General was quoted as saying that he was “delighted that our campaign to secure an exemption from the requirements of the Insurance Mediation Directive for freight forwarders, which has involved a change in UK legislation, has been successful.”
“BIFA is the primary UK trade association providing effective representation and support for the UK international freight services industry. As such, we provide a conduit through which the views of our members are listened to in many quarters.

“Our success in gaining this exemption was due entirely to our persistence and conviction that we were right to protect the interests of our industry, in the name of freedom to trade and in the face of unfair competition. It is a testimony to the lobbying activities that we undertake on behalf of our members.

“Now, we are investigating the establishment of a Consumer Code of Practice, which, subject to the approval of Ministers, could extend the exemption to freight forwarders’ retail customers at a later date.”
With both major political parties discussing the need for change in the way our industry is regulated this latest withdrawal of powers must be seen as a heavy blow for the FSA. With suggestions in some quarters that the body is in need of a vast overhaul if not being abolished completely and replaced with a more industry specific organisation.
Against a changing face of European legislation and regulation the United Kingdom General Insurance industry is crying out for a lighter touch in terms of guidance and enforcement regarding Freight Insurance. This latest retreat within the sector could be seen as a final role of the dice by the treasury as they endeavour to make the FSA an organisation that can work in harmony with the industry.
However, by leaving a system in place that punishes those that had tried to work with them in the first place, the FSA has once again managed to cause the headlines for all the wrong reasons.

By Kris Oldland

Bespoke open cover Freight Forwarder Insurance is available from Premiercare Insurance Brokers (UK) Ltd.