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SubroGateway Coast Underwriters CG

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Major loss of cargo of bulk concentrate when the bulk carrier ... insurance through freight forwarders for convenience and due to lack of known alternatives ... – PowerPoint PPT presentation

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Title: SubroGateway Coast Underwriters CG


1
SubroGateway Coast UnderwritersCGB
GroupPresentationCRIMS MONTREAL
20 Sept. 2005

2
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3
Losses Hitting Canadian U/WRs
  • Destruction of clothing in containers in Sri
    Lanka during the Tsunami in S.E. Asia in January
    2005
  • Major loss of cargo of bulk concentrate when the
    bulk carrier broke up and sank off the coast of
    Japan
  • Various thefts of entire containers in three
    different continents
  • Ongoing problems with cargo being discharged in
    Venezuela
  • New Orleans - Katrina

4
Kevan is an Underwriter
  • An Underwriter one who lacks personality to be
    an Actuary.

5
Kevan is Well Balanced
  • We are all born mad some of us remain so.

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Impacting Rate Fluctuation
  • Regulatory Compliance Regimes such as U.K.
    Financial Services Authority (FSA) and Sarbanes
    Oxley (SOX)
  • European Union Commission inquiry about to
    commence
  • Threat of International Terrorism
  • Following 9/11 revised Catastrophe Models
    influencing Reinsurance protection
  • More conservative investment strategy
  • The Spitzer factor impact of changing business
    models surrounding remuneration

9
OFAC
  • The Office of Foreign Assets Control ("OFAC") of
    the US Department of the Treasury administers and
    enforces economic and trade sanctions based on US
    foreign policy and national security goals
    against targeted foreign countries, terrorists,
    international narcotics traffickers, and those
    engaged in activities related to the
    proliferation of weapons of mass destruction.
    OFAC acts under Presidential wartime and national
    emergency powers, as well as authority granted by
    specific legislation, to impose controls on
    transactions and freeze foreign assets under US
    jurisdiction. Many of the sanctions are based on
    United Nations and other international mandates,
    are multilateral in scope, and involve close
    cooperation with allied governments.

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11
Len Notaro
  • Insurance Brokers are premium lovers.

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Captives Benefits
  • Lower Insurance Costs
  • Greater Claims Control
  • Cash flow benefits
  • Fronting for reinsurance capacity
  • Unavailable coverage or cost of cover
  • Tax minimization and deferral

14
Captives Obstacles
  • Up Front Capital Commitment
  • Fees (License, Directors, Audit, Fronting)
  • Management expenses
  • Premium Taxes
  • Required Expertise
  • Reinsurance Costs
  • Sarbanes Oxley (SOX)

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Jerry Giroux
  • "The definition of a consultant
  • Someone who borrows your watch, tells you the
    time and then charges you for the privilege."

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18

The New Businessof Insurance
19
Old Mission Statement
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New Mission Statement
23
Operating Model
P
Profitability
FAST
FAST
Tactical
D
I
Distribution
Infrastructure
Strategic Vision
Behavioral
Leadership
Guiding Principles
Cultural
Core Values
WHERE IS REFERENCE TO THE CUSTOMER?
24
Going Forward 2006
  • Aggressive Insurance Market
  • Premium savings used to buy additional limits
  • Cover and conditions negotiable
  • Captives and risk retention remain as useful
    alternatives
  • Marine markets to offer broader products
  • Sarbanes-Oxley mandates for improved risk
    awareness
  • Face to face meeting with underwriters
  • Retro Rating and Swing Programs

25
Captives
  • Smoothing effect of losses
  • Cash flow benefits
  • Unbundling of conventional products
  • Consolidating global exposures
  • Reduction of government restrictions

26
Web Based Solutions Logistics Risk Management
Industry Issues
  • Inefficient, paper-based, labor intensive process
  • Certificate control often in the clients hands
    leaving room for errors, omissions and fraud
  • Inability to access standardized data for risk
    analysis
  • High administrative customer service costs
  • Submission management
  • policy certificate issuance
  • premium calculation
  • coverage issues special case handling
  • billing collection
  • claims management

27
Web Based Solutions Opportunities For Growth
  • Many shippers continue to book insurance through
    freight forwarders for convenience and due to
    lack of known alternatives
  • Companies and assureds have embraced
    Internet-based quote, bind and issue applications
    for home, auto life policies and the same
    principles have been successfully applied for
    Marine Cargo (e.g. Oceanwide.com)
  • Management of your own data in one environment

28
Web Based Solutions Internet Application Basics
  • Paperless and easy-to-use
  • Accessible using a standard web browser
  • State-of-the-art security and encryption
    technologies
  • Branded client/partner-facing web sites
  • Integration into client logistics management
    systems as well as underwriter back-office claims
    management and accounting systems
  • ASP vs. Deployed solution considerations
  • Availability and cost of internal IT resources
  • Experience with on-line application marketing
  • Speed to market

29
Web Based Solutions Internet Marine Cargo
System Functionality
  • Policy issuance / accessibility
  • Certificate generation with policy compliance
    validation automated referral workflow for
    special-case shipments
  • Shipment/storage declarations and premium
    calculation (Marine, War, Storage, Vessel
    Penalties and taxes)
  • First notice of loss entry and claim status
    reporting
  • On-line claims file for settling agents, brokers
    assureds
  • Flexible exception-based alerts, emails and
    reporting
  • Real-time underwriting control over policy
    conditions, limits, rates and access
  • Automated billing, payment and receivables
    management
  • Sophisticated data analysis reporting tools
  • Detailed audit trail
  • Clause library and reference table lookups to
    speed entry

30
Web Based Solutions Benefits for Clients
  • Eliminates paperwork redundant typing
  • Speeds up certificate preparation bordereau
    reporting
  • Enhances workflow efficiency through
    collaboration between shippers, brokers and
    underwriters
  • Eliminates errors helps prevent/detect fraud
  • Integration with existing systems offers ultimate
    ease of use and efficiency while providing
    complete shipment detail for risk management
    purposes
  • Improved risk management offers potential for
    lower costs

31
Terms of Sale
  • 1. The Carrier Covers My Losses
  • 2. I Export F.O.B.
  • 3. I Import C.I.F.
  • 4. Nothing Will Happen To My Goods
  • 5. I Already Have My Own Cargo Policy

32
SubroGateway
Applicable Laws
  • US COGSA
  • HAGUE RULES
  • HAGUE-VISBY
  • HAMBURG RULES
  • TRUCK TRANSPORT ACT
  • Q.C.C. (NOTICE)
  • New CIFFA STCs

33
Agency Role - Other Clauses
  • The Company does not assume a role as principal
    by delivering a fixed price quotation or invoice.
    The Customer acknowledges that the difference
    between the amounts payable to third parties
    retained to carry out the Customer's instructions
    and the fixed price represents the Company's
    gross profit for its services.

34
Forwarder New Conditions 2005
  • When acting as an agent, the Company acts solely
    on behalf of the Customer in engaging the
    services of third parties on the usual terms and
    conditions on which the third parties offer such
    services for the carriage, storage, packing or
    handling of any goods, or for any other service
    in relation to them, thereby establishing a
    direct contract between the Customer and the
    provider of such services capable of being
    enforced by the Customer as principal, whether or
    not the Customer is identified in the contract.
    The Company shall on demand by the Customer
    provide evidence of any contracts made on its
    behalf.

35
2. I Export F.O.B.
  • At Which Point Does The Insurance Attach?
  • Portions Of The Trip May Be Uninsured
  • Lethal If Combined With Extended Payment Terms
  • Weak Currencies Abound
  • Trade Law And Business Law
  • Sellers Interest ... At Minimum

36
INCO TERMS COMPARED 1. FOB Free On Board
Buyer
Seller
SELLERS COST
BUYERS COST
SELLERS RISK
BUYERS RISK
37
3. I Import C.I.F.
  • This Is As Bad As Exporting F.O.B.
  • What Is I?
  • Insurance Cost Is Hidden
  • Where Does Cover Cease?
  • Third Rate Currency?

38
INCO TERMS COMPARED 2. CIF Cost, Insurance,
Freight
Buyer
Seller
Buyers Cost
SELLERS COST
Buyers Risk
Sellers Risk
39
Rule of Thumb
  • Export C.I.F.
  • and
  • Import F.O.B.

40
INCO TERMS COMPARED 1. FOB Free On Board
Buyer
Seller
SELLERS COST
BUYERS COST
SELLERS RISK
BUYERS RISK
41
3. I Import C.I.F.
  • This Is As Bad As Exporting F.O.B.
  • What Is I?
  • Insurance Cost Is Hidden
  • Where Does Cover Cease?
  • Third Rate Currency?

42
INCO TERMS COMPARED 2. CIF Cost, Insurance,
Freight
Buyer
Seller
Buyers Cost
SELLERS COST
Buyers Risk
Sellers Risk
43
3PL 4PL
  • Why outsource?
  • Can someone else do it better or cheaper?
  • Can someone else do it for less than our cost of
  • capital?
  • Does someone else have a better means of
  • achieving end-to-end visibility?
  • Do we have the necessary skills to orchestrate a
  • complex supply chain?
  • Outsource the execution of a process but not its
  • control

44
BPO - Did You Know?
  • Claims staff process recovery early
  • Improved cash flow
  • Underwriters write superior risks
  • Your deductible is recovered
  • Rates up! Cover cut back! Deductible up!
  • So what? Now what? Learning Culture
  • Demands on capital Personnel and Expertise
  • Large technology investments
  • ID Goodwill vs. Liability
  • Offer Solutions.

45
SubroGateway Inc.Open the Gate to a Smart Claims
and Recovery SolutionSubroGateway Inc. the
choice of your Marine Underwriters!
  • Our Services Include Asset
    Recoveries and Subrogation (no cure-no pay)
  • Abandoned goods
    Collection of bad debt
    Deductible recovery
  • FF lien positions
    Claims management
    Marketing of salvage
  • Assisting your customer
  • Covering your NVOCC position with carriers
  • Education and Seminars on Marine Insurance
  • Proud to be a member of CIFFA
  • Jerry Giroux, President Ph416-365-0184
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