1. Existence of New Niches in Market?
A review of Insurance along the supply chain
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia
Bryan Rettmann, Speaker

2. Second IberoAmerican Symposium of Marine Insurance
Global Reach, Local Service
Product Evolution In The Supply Chain For Shippers For Logistics Operators
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia

3. Historical Perspective
“Supply Chain” Discussions Were Fairly Simple
How to move goods from point A-B
What was the optimal inventory level to assure ample supply
Evolution of “Just in Time” Inventory
Shift to Global Sourcing / Manufacturing
Cost savings
Strategic: Proximity to customers
When we talk about Supply chains its important to note how they have evolved, what are current trends and what might the future hold.
Until probably the last 20 – 30 years Supply chain discussions were fairly simple. They focused on price of transportation, maintaining a backlog of inventory in case replacements were delayed for some reason, and manufacturing or sourcing from fairly close locations wherever possible.
The next innovation was really the “Just In time” idea. Companies focused on keeping their supply chain reliable, so they could maintain minimal levels of inventory to free up their capital. Reliable supplies, predictable transit and delivery times became imbeded in our collective business culture when we talk about sourcing, manufacturing and final distribution.
The next and current evolution is the pursuit to find the lowest cost materials and manufacturing base wherever it lies in the world. As wages and materials rise in low cost countries as demand rises, the supply chain adjust again. And this pace gets faster.
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia 3

4. Changing Role of Logistics Operators
Continued Outsourcing Of Logistics Operations
Logistics Firms Have Expanded Roles
Ocean /Air / Ground / Rail transport
Customs Brokerage
Warehouse / Distribution /Inventory Management
Returns and recycling
Contract manufacturing and packaging
Trade Finance
Licensed, standalone insurance agencies
Third Party Claims administrators / Recovery agents
Logistics companies are playing an ever greater part in the supply chains. Historically focused on just transportation, they have expanded their service lines dramatically. As supply chains become more complex, companies are outsourcing more and more functions to logistics companies. These firms invest heavily in IT systems for ever better visibility of goods as they progress in the supply chain.
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia 4

5. Product Evolution - Cargo Owners
Stock Throughput
Combined Property / Cargo
ALOP / DSU – Project Cargo
Supply Chain Interruption
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia

6. Second IberoAmerican Symposium of Marine Insurance
Stock Throughput
Stock insurance combines transit (ocean and inland cargo) with "static location" coverage, insuring owned goods in both storage and transit by sea, air, or land most anywhere in the world.
Highlights
More inclusive than Cargo Policy
Eliminates gaps in cover in a property policy
Can cover an assureds' goods, materials, finished items in transit to the final point of sale (retail locations)
May Require local Policies on a multinational program
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia

7. Combined Property / Cargo
Combines Cover for real property and Cargo Insurance.
Highlights
Combines all the elements of a stock through put policy.
Includes Business Interruption for static risks
Includes Real property Furniture and fixtures
Form can be simplified, streamlined and more easily understood.
No gaps in cover.
One renewal, one form, reduced transaction costs.
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia

8. ALOP /DSU Infrastructure Projects
Designed for construction contractors, energy companies, major manufacturers, or any entity with insurable interest in a major infrastructure project, a Cargo/DSU policy form provides:
Cargo coverage for infrastructure equipment and materials from factory to project site.
Advanced Loss of Profit (ALOP) and Delay in Start up (DSU) coverage, which protects customers against financial loss arising from loss or damage to insured “critical” materials and equipment during transit.
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia

9. Second IberoAmerican Symposium of Marine Insurance
Definition of Critical Item:
All equipment, plant and materials which, in the event of total loss during transit, cannot be manufactured, replaced, shipped, installed, tested and commissioned within 3 months, or which cannot be repaired at the destination, or which the unit price in excess of USD2 million and be shipped in breakbulk.
MLCE IS KEY
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia

10. Supply Chain Interruption
“All risk” enhanced contingent business interruption coverage
form for supply chain exposures.
Property Insurance generally excludes BI unless there is physical loss or Damage
Supply Chain Interruption requires an upfront assesment of the supply chain and covers virtually all perils for named suppliers.
Political risk,
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia

11. Second IberoAmerican Symposium of Marine Insurance
Logistics Operators
Liability Covers
Freight Services Liability / Errors & omissions
Enhanced liability contracts (Bespoke)
Port and Terminals Package
Terminal Operators Liability
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia

12. Freight Services Liability
An “Integrated” Liability Solution covering …
Liliability under contract, international convention, mandatory national law, etc. for loss of or damage to or the delay in delivery of Customer Goods arising in the ordinary course of providing Insured Services, and
Liability in respect of claims made against you for breach of professional duty arising from an inadvertent error or omission committed in good faith (clerical errors, provision of incorrect advice or information, faulty arrangements and failure to comply with or provide instructions)
Insured Services – When the Insured undertake to transport, store and handle customers goods for reward in the capacity of
Freight forwarder (land, air, sea)
Contract carrier (land, air, sea)
Road Haulier
Warehouse keeper
Customs Brokerage
3 PL / 4PL
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia

13. Enhanced liability contracts
Growing Trend of Companies contractually shifting risk of loss or damage to Logistics Providers
Coverage for a logistics company for liability assumed in a customer’s contract above and beyond their normal terms and conditions.
Allows for companies to bid competitively on non-standard contracts
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia

14. Ports & Terminals Packages
Highlights: Combines liabilities, physical damage and business interruption coverages.
Port /Terminal Operators liability
Equipment
Property
Business Interruption
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia

15. Terminal Operators Liability
This form provides liability insurance for damage to cargo while it’s in a terminal operator’s care, custody and control
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia

16. Logistics: Growing Insurance Distribution
Products to sell to Logistics client base
Shippers Interest Programs
Licensed as stand alone Insurance Agency
Licensed Claims Third Party administrators and recovery agents
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia

17. How to adapt these product offerings in local Markets?
SCALE
Establishment of forms in local market, and regulatory acceptance
Talent: Understanding of the underwriting discipline and trained staff
Support of Loss Control Expertise
Client Education!
Second IberoAmerican Symposium of Marine Insurance
Bogota, Colombia