Yes, there are opportunities in Marine Insurance

Colin Moodley, the Managing Director at Terra Marine, a Constantia UMA  Partner, shares their approach to Marine Insurance and why he thinks there are opportunities for brokers to get involved.

COVER: When one thinks of marine, the word, you tend to think of water, the sea and boats but, that is only half the story of marine insurance. Please give us a brief overview of Marine Insurance.

Colin Moodley: Marine insurance has three main classes. The first is cargo insurance, which our business specifically focuses on. The second class is Marine Hull, where you insure the actual boats in terms of whether it is commercial or private. Private, for example, would be something like a jet-ski. The third class of marine insurance is marine liabilities, where you insure a charterer’s liability or Stevedore’s liability. So, those are just the three basic classes of marine and we at Terra Marine currently fall under the cargo section, where we only specialise in cargo.

What we cover is however wide ranging, and includes conveyances that are on road, on rail, on cargo planes and also on the sea. Although the word Marine is used, a normal GIT policy will fall under a marine classification, in terms of the cargo programme. An import/export can have legs, where it comes off the vessel and there is a transport leg inland. This means that there are various aspects of the risk in terms of Marine, but it basically covers any movement of cargo, and that can happen either by sea, air, rail or road.

COVER: First COVID then the looting. It has been quite a period. How has that impacted on the Marine environment and on Terra Marine?

Colin Moodley: Interestingly, our business was formed in March 2020. Then, towards the end of March, began the various lockdowns for COVID. We officially started with Constantia this year on the first of June and we find that COVID affected the global supply chain in terms of goods. Through the various border restrictions and lockdowns we found that, over the last two years, import volumes and export volumes have declined. As insurers we insure this supply chain of products so, when you see a decline in imports, you find it affects your demand in insurance.

Any negative impact in terms of the global supply chain, therefore affects our business. Then, as things got better and the levels of lockdown came down to level one, we had the looting. Which, then again, put a strain on our local supply chain. We had a lot of warehouses storing cargo, that went up in flames. We lost a lot of our trucks, which also move cargo as part of the supply chain, that were affected. We also had a lot of congestion at our ports, obviously with the backlog of orders from suppliers. It is just a ripple effect of number one; the pandemic and number two; the looting. So, you add all that together, it has a very negative impact in terms of marine insurance and in terms of our cargo insurance, because there is less demand now for that type of cover.

COVER: With that as backdrop, how do you see the coming year playing out?

Colin Moodley: I think one of the biggest challenges is the uncertainty in terms of COVID. I keep hearing of a potential fourth wave, we are not sure whether we are going to go into a different lockdown. So, for us as a business, it is the challenge of being able to navigate through this and finding a way to survive with this uncertainty in place.

The other challenge is the economy. We need businesses to get back on their feet and we need them to start purchasing more. We need the importers to start buying and the exporters to start selling. We always have this saying in Marine that, we follow the fortunes of companies. So, if your company is growing, then there is a demand for cargo insurance, and there is a demand for other lines of insurance as well. We ensure the growth of these companies, if they do well, we do well.

COVER: Can all brokers play in this segment or is it only really an option for the specialist brokers?

Colin Moodley: We have a huge multinational and national broker following. Some of the major independent brokers all have Marine divisions. We have found that Marine needs a specialist, as it needs a specialist focus. Marine is one of the oldest classes of insurance and is a continuously evolving industry and Market. We always have new clauses that have to be looked at, and old clauses that need amending.

It is important for brokers to have that knowledge on the core of what marine covers, as that stays the same. One of our rules is that we would only do business with a marine broker, if they understand Marine and have done some sort of marine training. We offer training because we see new marine entrants coming into the market all the time and the FSCA has now made it mandatory that, if you are writing a specialist risk, you need to have specific training for that.

We are finding a whole lot of brokers that are getting involved. It is a market with great opportunity because, if you are doing corporate lines or liabilities for a client, you find that they are purchasing goods from overseas, which has a marine element to it. So, we see brokers from all spectrums and yes, brokers need to have specialist knowledge to be able to offer marine cover.

COVER: Do you have any tips for brokers that are coming into marine looking for opportunities or existing ones wanting to expand their book?

Colin Moodley: One of the main advices I would give brokers, when looking for an insurance partner, especially on the Marine side, is to find a partner that they can trust. A partner that does what they say and adds value to the business, not only on the pricing side, but also on the risk management side.

We often see that, once the deal is done, the risk management element stops, but we believe that risk management should be a daily habit. It shouldn’t only be on renewal of new business. So, if you can find a partner or an insurer that has access to professionals who can assist you and your clients in terms of security surveying and risk implementation, that is key.

COVER: Do brokers rely on specialist knowledge support?

Colin Moodley: Yes, your bigger national brokers have experienced people in Marine, so it is always nice having them on board. But we do training with the newer brokers that come in and want to get involved in Marine and we go with them to their clients, to assist them. We get involved in their business and in how they work on their Marine accounts. We are very hand-on, adding value to those brokers that need a little bit more Marine knowledge and technical skills.

COVER: What would your unique value proposition be?

Colin Moodley: We thought about this long and hard and for Terra Marine, it is all about partnership. We are here for the long term. We go out of our way to get to know brokers and our clients. We want to get to know their operations.

We say, partner with us, broker and client. Let us learn who you are, let us walk this journey with you. It is all based on trust. Our biggest value is that, over time we build trust as we partner with the broker and client, for the long term. We back that relationship with technical skills and claims infrastructure to address claims that may arise.

COVER: Lastly, when did you tie up with Constantia and was there a particular reason why you went with them?

Colin Moodley: We were very excited to tie up with Constantia on the first of June this year. It is a fantastic opportunity for us because Constantia and Terra Marine are very like-minded businesses. They have been absolutely fantastic towards us. We are the first Marine UMA they have, which gives us great opportunity to grow and expand our business, with Constantia.