american institute of marine · pdf filehe membership list of the american institute of marine...

T he membership list of the American Institute of Marine Underwriters is something of a “Who’s Who” in the business. Founded in 1898, the AIMU

is a trade association for insurers, reinsurersand brokers. Its members are involved ininsuring vessels (from the largest of the con-tainer-carrying behemoths to the small tug-boats in harbors) and their cargoes. AIMUmembers underwrite most of the risks thatare insured in the United States. Premiumsfrom policies underwritten by AIMU members

in 2006 totaled approximately $2.5 billion. Well-known names on the members list

include Starr Marine Agency (a wholly ownedsubsidiary of C.V. Starr & Co.) and the OceanMarine Division of Travelers Insurance Co. Notsurprisingly, the group is closely intertwinedwith maritime attorneys, as well as salvors,surveyors and claims settlers, a number ofwhom are members. Its purview also includesoffshore energy, pleasure boating and yachtinsurance.

Like its international analog, the

International Union of Marine Insurance, theAIMU provides a combination of advocacy,education-information exchange and ongoingnetworking for its members. In addition toits annual meeting, regional forums (includ-ing the West Coast and Canada) and ongoingcommittee work, the AIMU is activelyinvolved in the workday world of insuranceclaims. For example, it maintains contactwith surveyors around the world who aresometimes involved in settling insurancematters, and it provides standard contracts

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Beyond basic insurance, marine underwriters alsoprovide the industry with the informational resourcesnecessary for success within a quickly evolving field.

and clauses that can be used by members. Ina fast-changing world, members are keptabreast of legal opinions and legislation, atall levels, that affect the marine insurancebusiness.

“We made a decision to emphasize educa-tion,” says Jim Craig, AIMU president, whoexplained, “Our membership got together afew years ago and crafted a strategic plan.Educating our members on what’s happeningin a very fast-changing world was high onthe list of priorities expressed by the members.”

In talking about AIMU activities in thisarea, which include Web-based training andseminars, Craig succinctly described animportant organization goal as being “toenhance the professionalism of the under-writing community.” Introductory courses arecurrently offered in the areas of cargo insur-ance, hull insurance, P&I coverage, yacht

insurance, ocean marine insurance and oceanmarine claims examination. An advancedcourse in cargo insurance was recentlyoffered.

At the upcoming mid-November New Yorkmeeting, AIMU members will be briefed onimportant trends and issues impactingmarine insurance. Speakers will include U.S.Maritime Administrator Sean Connaughton,who will discuss the MaritimeAdministration’s efforts to stimulate trade,including new initiatives that may open upthe long-talked-about “short-sea shipping”lanes. AIMU Chairman Richard Decker, presi-dent of AIG Global Marine, will provide aninsurance market overview, and Craig willdiscuss the organization’s committees andthe educational programs. The AIMU’s legalcounsel, Joseph Grasso of Thatcher Proffitt,will review current regulatory and legalissues, and will provide insights into the leg-islative landscape.

The mood at the meeting is likely to beupbeat. David French, president of StarrMarine, and a past chairman of the AIMU,told The Journal of Commerce, “Given therecord level of world trade and resultingshipowner profitability, never in my experi-ence have marine underwriters been in a bet-ter position to receive the right pricing fortheir product and service to the industry.”

Sean Dalton, vice president of TravelersOcean Marine, described 2007 as “a goodyear with good results by a number of themajor insurance carriers.” Dalton, who is incharge of Travelers’ Marine Field UnderwritingOperations, said, “Yes, it’s a competitivebusiness, but we see plenty of opportunities;no one company can drive the entire market-place. We are fortunate in that our cus-tomers, the people that we insure, are oper-ating in thriving markets. The economy hasbeen good to them.”

Though business has been good and tradeflow growth has exceeded gross domesticproduct growth, complexity in supply chainsis the rule rather than the exception. Arecent case, which ultimately went the U.S.Supreme Court, shows the multiple faces ofthe AIMU in action. In the “Kirby case,” thecourt found in favor of Norfolk SouthernRailroad, the land carrier in a complicatedmultimodal supply chain starting inAustralia. The case involved a non-vessel-operating common carrier that dealt with theshipper, an ocean carrier, which issued a billof lading, and then NS.

After a derailment and damage to thecargo, the railroad sought to limit its liabili-ty, but the legal ground was muddy, and the

case then worked its way up through thecourts. In its role as an advocate, the AIMUfiled an “amicus curiae” (friend of the court)brief with the Supreme Court, taking a posi-tion supporting the shipper and its under-writer — an AIMU member. Following theSupreme Court’s ruling, the AIMU’s educationand informational aspects kicked in, as mem-bers needed to be informed about theSupreme Court’s decision and its importantimplications.

Recently, the AIMU filed another briefwith the Supreme Court, this one on behalfof Exxon Shipping in the widely publicizedExxon Valdez case. According to remarks tobe delivered by Craig, “The key issue waswhether the punitive damages award imposedon Exxon was permissible and proper underfederal maritime law.”

In its paper, the AIMU clearly explains itsrationale for filing: “The current conflictbetween (different circuit courts) that haveaddressed the issue of punitive damagesunder federal maritime law has resulted in asignificant erosion of the clarity and pre-dictability on which the members of AIMUdepend to provide insurance that is vital tomaritime commerce.”

Additional fresh legal and regulatoryissues are highlighted in the recent AIMU’s“Issues Book,” which is available to membersonline. The most recent volume highlightsissues such as the removal of shipwrecks —the subject of an International MaritimeOrganization May 2007 diplomatic conven-tion — and places of refuge for vessels, amatter studied by the non-governmentalassociation Comité Maritime International.Hot-button issues closer to home, such asenvironmental protection and maritime secu-rity, are also covered, as are the detailedlegal intricacies of the United NationsCommittee on International Trade Law.

Looking back on what’s been accom-plished, Travelers’ Dalton talked with greatpride about the Marine Claims Department’srecent conclusion of a final settlement witha large customer — a shipyard whose facili-ties and entire operation took a severe bat-tering in Hurricane Katrina. Dalton, a KingsPoint graduate who was honored by theAIMU last year, described the importance ofalways taking care of customers, including inmatters involving complex claims and largeamounts of money. He said, “The yard hasnow been able to completely resume opera-tions. The insured was recently asked by itsU.S. senator’s office about its experiencewith the insurance company post-Katrina,and they responded that Page 52 >

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their case should be amodel of how big insurance claims should behandled. From Travelers’ standpoint, we arejust glad that we were able to get them upand running as quickly as possible.”

Similarly, Starr Marine is committed to itscustomer base. David French said, “StarrMarine has invested heavily in added-valueservices such as marine loss control andenabling our producers and clients to pro-duce their cargo certificates via theInternet.” Though such investments comewith a cost, there is also a payoff. Frenchadded, “By differentiating ourselves from thecompetition in these ways, we have achievedour profitable growth objectives in an albeitcompetitive marine insurance market.”

On the technological front, the AIMU itselfhas used the Internet and video conferencingto overcome time zones and geographical dis-tance in a worldwide business. Craig said, “Ata seminar we held in May, the keynotespeech, by Joe Plumeri, who is the chairmanof Willis, was made available live to the mem-bership that could not attend the seminar.”Likewise, two sessions from the IUMI’s earlySeptember meetings in Copenhagen werereplayed for North American members. Craigsaid, “The keynote, by C.V. Starr’s chairman,Maurice “Hank” Greenberg, was replayed tothe membership later in that same day sincethere was a six-hour difference

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S hipping cargo is a risky business. You worry about stormy seas. You worry

about cut-throat competition. You worryabout the impact of the rising price offuel.

One thing you shouldn’t have to worryabout is your insurance coverage.Unfortunately, if you’re in a fast-pacedmode and your plans change unexpected-ly, you may find out too late that yourpolicy doesn’t have you covered. That’sbecause many cargo insurance policiestypically limit the types of goods thatqualify for the broadest coverage.

For example, if your core business isimporting ballpoint pens but you suddenlyhave the opportunity to load up on spaceheaters or lawn mowers, notifying yourinsurer is probably low on your list ofthings to do to get the deal done. Butwhen something goes wrong and you try

to file a claim, you may discover thatyour standard insurance is great for ball-point pens but is extremely limited foranything beyond your usual cargo.

Or take the agreement that you, as thebuyer, thought you had with the sellerabout who was insuring the cargo you arewaiting to receive. After a disaster hashappened is not the best time to discoverthat there was a misunderstanding andthere is no insurance, or that the sellerhas arranged for inadequate coverage withan unreliable or slow-paying carrier.

With Travelers, these types of circum-stances are not a problem. Under our

Cargo EliteSM coverage, any new productthat you import or export is automaticallyinsured on an “all risks” basis. And thecontingency insurance that is automati-cally included with Cargo Elite takes careof any unexpected issues that may arisewith respect to who was supposed provideinsurance, and on what terms.

In fact, Cargo Elite will even advancefunds to cover what other insurers oweyou but may simply be slow to pay.

Why is Cargo Elite structured to provideflexibility for on-the-go importers?Because Travelers knows that the key tosuccess for these businesses is to jump ona deal when the time is right, withoutworrying about insurance details. Whenyou buy Cargo Elite, your coverage is onautomatic pilot — and you can go backto worrying about the weather and yourcompetitors, not your insurance. ■

Seas are uncertain; your ocean cargo coverage shouldn’t be

Court case decisions in situations such as the Exxon Valdez oil spill have far-reaching effectson the business approaches of marine insurers.Page 54 >

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in time. Also on thesame day, the IUMI Cargo Committee’s work-shop topic on accumulation was conferencedlive to the AIMU boardroom in New York.”

The future is promising for Travelers andits continuing leadership in the market. “Weoffer a breadth of products and depth ofexperience unparalleled in the business,”said Dalton, who holds a master’s in trans-portation management as well as the covetedCPCU designation. “We can do a superior jobof meeting the needs of both small and largecustomers. With the big guys, we are able tooffer multiple insurance product lines thatcut right across all aspects of the customer’sbusiness. We have long-term relationships —we have been able to earn the business ofdemanding customers, and keep it.”

French, overseeing the activities of anoth-er market leader, summed up his firm’s valueproposition, “Starr Marine has specialized inocean marine insurance for over 60 years andhas grown to be one of the largest writers ofocean marine insurance in the U.S. Few man-aging general agencies are able to offer thebreadth of tailored marine products and serv-ices available through Starr Marine, includingmultinational cargo programs, marine liabilitycoverages and hull insurance, often incorpo-rating risk management/captive approaches tobest meet a given client’s needs.” ■

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Starr Marine, an ocean marine specialistwith more than 60 years of experience,

is one of the leading writers of oceanmarine insurance in the United States. StarrMarine is a managing general agency forvarious member companies of the BerkshireHathaway group of insurance companies.Berkshire Hathaway’s financial strength rat-ings are the highest in the insurance indus-try, providing independent confirmationthat the Berkshire Hathaway group issuingcompany has a superior ability to meet itsongoing obligations to policyholders.

Few insurers offer the breadth of tai-lored products and services availablethrough Starr Marine. Customized multina-tional cargo programs, a full range ofmarine liability coverages, hull insuranceand risk management solutions tailored tomeet our clients’ needs are only a fewexamples of the products and services weoffer worldwide.

A highly experienced team of marineprofessionals with local authority allows for

quick decisions at the point of sale.Customer-service standards that are con-stantly benchmarked and enhanced guaran-tee a consistently high level of service.

Starr Marine’s claims network is staffedwith in-house marine claims specialists whounderstand local law and business practice.In partnership with VeriClaim, we have theknowledge and expertise to handle eventhe most difficult claims wherever andwhenever they occur.

We recognize that every dollar recoupedfrom salvage and subrogation reduces ourclients’ total cost of insurance. Operatingthrough our network of claims specialists,

Starr Marine has a team dedicated toachieving consistent, superior recoveryrates for our clients.

Years of experience in internationaltrade allow our loss control services teamto help develop cost-effective recommenda-tions to minimize exposure and preventtransport losses. Our loss control servicesteam can assist in designing and coordinat-ing a comprehensive plan tailored to theclient’s individual needs.

Starr Marine has the global network,local expertise and professional capabilitiesto provide outstanding service to clientsworldwide. ■

Starr Marine — a premier marine insurance provider

By integrating environmental protection and maritime security policies into current marineinsurance discussions, industry leaders ensure successful client partnerships.

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