Skippers insurance launches to broader broking market
Bedggood described MSI as “a standalone liability product for delivery and commercial skippers when they are in charge of vessels they do not own.” Bowen suggested their coverages are getting healthy market traction.
“New business enquiries have been very strong and we have been steadily building the portfolio, making connections where we need to with the right people,” he said.
Education challenges
One of the current challenges, said Bowen, is educating the broader maritime industry about their product and their view that there is a need for it.
“Many professional skippers do understand the need for the coverage. However, others do not,” he said.
In an interview with IB last year, Bedggood, who is director of sales and distribution, estimated that many of the 12,000 to 15,000 active commercial skippers in Australia would be interested in the coverage.
“There are thousands of skippers that will buy this product now,” he said.
Until the launch of MSI, Bedggood said marine skippers were uninsured and sometimes financially targeted for any damages to the vessels they captained – a process called subrogation.
“There have been a couple of events in Australia where there was some limited damage of AU$30,000-40,000 and the hull insurer has paid it out to the owner and to the repair and then they’ve sought to recover their damages direct to the skipper,” Bedggood said.
This issue, he said, was the major reason he developed the product together with Sydney-based Bowen.
Bowen said he and Bedggood are currently focusing on continuing to build the brand and a profitable portfolio of business with underwriting and distribution partners.
“Our goal in the next 24 months is to develop an offering for international boat movements,” said Bowen.
The world’s oldest insurance product
Skippers insurance is an offering in the marine insurance sector, a sector that is often regarded as the oldest of all insurance products. In an interview with IB, Ben Healey, Sydney-based underwriter for AXA XL, said the first marine insurance offerings involved Chinese silk traders.
“This was in about 600 AD and they came up with the concept of what became insurance,” said Healey, marine hull and liabilities specialist. That was a time when ship voyages could last many months, even years, and losing vessels was a regular occurrence.
“They would put parts of their cargo on different vessels so that at least some of it would make it to the final destination rather than putting it all in their own boat and losing the whole lot,” he said.
More than 1,000 years later the first contract of insurance was signed for a marine hull policy in the Lloyd’s coffee shop. Today, hundreds of years on, marine insurance stands out in the insurance industry for its reliance on brokers.
“I think marine insurance is one of the last classes of insurance left where you have to use a broker. So, we end up working very closely with the brokers,” Healey said.
In terms of industry challenges, Healey said during last year’s interview that marine was under the same hard market pressures as other insurance areas.
“A lot of it is helping the brokers navigate those [hard market] issues with their clients and giving them the responses and the information that they need to have those tough conversations,” he said.
After two years of COVID-19, he said, more and more companies are placing a greater focus on the health and wellbeing of their employees. The same is true for employees at sea.
“I think crew safety is probably one of the big ones that the industry in general has been looking at,” he said. “It’s becoming more and more prevalent as a genuine risk factor for underwriters to consider.”
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