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From the Front Lines: Marine Cargo

"Right now, the big challenge is placing difficult and high-value risks,” says independent agent Robert Lamb. “We do a lot of oil and gas equipment and those numbers can get fairly high.”
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From the Front Lines: Marine CargoRobert K. Lamb

Owner

Lamb Agency for Marine and Bonds, Inc.

Austin, Texas

How did you get started at your agency? 

After working for Multi-Line Insurance Rating Bureau, now part of ISO, the International Division at Aon, and in risk management at Macy's and PepsiCo, I ended up working for a small surety company in Houston. There, I started and ran a couple of programs, including a motor cargo program throughout the state of Texas and a marine cargo program. At that point, I realized I was going to be much happier working on my own as an independent.

Why marine cargo? 

Our major line of insurance is customs bonds, primarily working with freight forwarders and customhouse brokers. While working with them, the question would come up about what other lines of coverage we can help with. One of the questions always was, “Do you write marine cargo insurance?" That's what got the program started.

Biggest industry changes?

The biggest impact has been technology, especially for the freight forwarding community because they were always responsible for completing the insurance certificates. It was often difficult to get some to report on time or to closely monitor what they were insuring. About 10 years ago, these online systems came in and allowed for much more control and a better loss experience. Prior to this, there was always someone issuing an incorrect certificate because they didn't understand the insurance concept, including sometimes insuring a commodity that was on the restricted list, sending to a destination that needed prior approval, or insuring for an amount over their policy limits.

Biggest challenges?

Right now, the big challenge is placing difficult and high-value risks. We do a lot of oil and gas equipment and those numbers can get fairly high. The largest shipment we insured was a $60-million shipment, but now underwriters are more conservative due to all the potential catastrophic claims from COVID-19, weather-related risks and other unrest. It's been more difficult to try to get the coverage the client wants.

Future trends in marine cargo insurance? 

Despite the pandemic, we still see things moving. We thought maybe there would be a drop off in the customs bonds, but while that book has remained stable marine cargo insurance activity has taken a hit.

Favorite success story? 

A few years ago, we had a freight forwarder that took on an account that was a microchip manufacturer, which is cargo that underwriters run away from because there's so much concentrated value. There was no program and they didn't know exactly how to handle it. I was able to get involved and we set up a worldwide program for them called a "stock throughput policy," which marine underwriters will write.

We covered everything from raw materials through to the processing of finished product including warehousing. Raw materials were initially processed here in the U.S. and then sent to distributors in Asia for completion. It was about $800 million worth of cargo each year, and that wasn't even insurance to value. We're a mom-and-pop operation, so I sometimes smile when I think about that.

Will Jones is IA editor-in-chief.

15502
Monday, October 26, 2020
Commercial Lines