MARKETING OF MARINE INSURANCE –A STRATEGIC APPROACH

INTRODUCTION

ORGIN OF MARINE INSURANCE

MARKETING STRATIGIES FOLLOWED IN UK

MARKETING STRATGIES FOLLOWED IN US

MARKETING STRATAGIES FOLOWD IN Asia

(this is with respect to role of intermediaries like agents, brokers, bankassurance in marketing
of marine insurance)

GROWTH OF MARINE INSURANCE:

GROWTH IN ASIA

GROWTH IN US

GROWTH IN UK

FUTURE OF MARINE INSURANCE

CONCLUSION
 CHAPTER-1

INTRODUCTION

ORGIN OF MARINE INSURANCE:

History

First codification was the English Marine Insurance Act of 1906. This is the act upon which
all subsequent acts are based, including the Canadian statutes. This was a codification of
existing jurisprudence and practice. The English Act was probably received in Canada as
Canadian law.

Governing Law/Legislation

Although the law of insurance is generally thought to come within Provincial jurisdiction
under the heading “property and civil rights” in the Constitution Act, marine insurance is now
understood to be a matter governed by Canadian Maritime Law (Triglav v Terrasses
Jewellers,[1983] SCR 283).

Federal Marine Insurance Act

Following the decision in Triglav v Terrasses Jewellers, the Federal Parliament enacted the
Federal Marine Insurance Act, S.C. 1993, c.22. This act is modelled on the English Marine
Insurance Act of 1906.

Provincial Insurance Acts

Prior to the enactment of the Federal Marine Insurance Act many of the provinces had their
own acts governing marine insurance. The British Columbia statute is the Insurance (Marine)
Act, RSBC 1996 c. 230. These provincial statutes are also modelled on the English Marine
Insurance Act of 1906 and are therefore not substantially different from the Federal Act.

The various provinces also have insurance statutes of general application which purport to
apply to marine insurance. The B.C. statute is the Insurance Act, RSBC 1996, c.226. Part 2 of
this Act contains various provisions of general application. Subject to certain specified
exceptions specified in section 3(b), these provisions purport to apply to contracts of marine
insurance. The B.C. Insurance Act purports to regulate such things as: contents of a policy

 Appraisals
 relief against forfeiture
 waiver
 misrepresentation
 payment of premiums
 time for payment of claims
 limitation periods, and
  third party claims against insurers

Nature and Scope of Marine Insurance

The nature and scope of marine insurance is determined by reference to s. 6 of the Marine
Insurance Act and by the definitions of “marine adventure” and “maritime perils” .It is a
contract of indemnity but the extent of the indemnity is determined by the contract. It relates
to losses incidental to a marine adventure or to the building, repairing or launching of a ship.
A marine adventure is any situation where the insured property is exposed to maritime perils.
Maritime perils are perils consequent on or incidental to navigation.

Types of Marine Insurance

 Hull and Machinery

Specified Perils v All Risks

It is important to distinguish between marine policies that are specified perils v all risks. A
specified perils policy is one in which the insurer agrees to indemnify the assured for losses
caused by specific perils that are identified in the policy. The Canadian Hulls (Pacific)
Clauses are examples of a specified perils policy. A loss must be caused by one of the
specified perils in order for it to be covered by the policy. Most hull and machinery policies
on commercial vessels are insured on a specified or named perils basis.

An all risks policy, on the other hand, provides much broader coverage. An all risks policy is
one in which the insurer agrees to indemnify the assured “against all risks of loss or damage”.
Things that are not covered by an all risks policy need to be specifically excluded. Most
cargo policies and many policies on yachts and pleasure craft are all risks policies.
PARTIES INVOLVED IN MARINE INURANCE

 Assured
The assured, also called the insured, is the person who has taken out the policy and
is obliged to pay the premium.
 Additional Assureds
Policies of marine insurance frequently either name additional assureds or contain a
clause that extends the insurance to additional assureds by description.

Underwriters

Underwriters are the entities that agree to indemnify the assured upon the happening of an
insured loss. They are also called insurers. Underwriters can be individuals or corporations.
Underwriters at Lloyds are represented by various syndicates who negotiate and sign policies
on behalf of the “names” they represent. It is not unusual for a policy of marine insurance to
have more than one underwriter. In fact, it is usual for there to be more than one. The policy
will name the underwriters and specify the extent of each underwriters interest. The first
underwriter named on the policy is the “lead” underwriter. This is the underwriter that will
make most decisions that are required to be made in the event of a loss.

Underwriting Agents

Underwriting agents are entities that have the authority to enter into or sign insurance policies
on behalf of the underwriters. They sign as agent on behalf of the underwriters and, because
they are agents only, they are not personally liable to the assured under the insurance
contract. An underwriting agent may represent more than one underwriter and may sign on
behalf of more than one underwriter.

P&I Clubs

P&I Clubs are similar to a mutual insurance company that offers third party liability coverage
to ship owners. The members of a P&I Club are ship owners. In a sense, the ship owners are
both insurers and assureds. P&I Clubs do not normally issue policies of insurance. Rather, the
terms of the coverage they provide are usually set out in the club's Rules.

Insurance Companies

The traditional insurance companies also operate in the marine insurance field as
underwriters. They may or may not use an underwriting agent.

Brokers

Brokers play an important role in marine insurance. They are the agents of the assured. The
broker will meet with the assured to determine its insurance requirements. The broker will
then canvass the market to find underwriters willing to insure the assured and will negotiate
terms with those underwriters. The broker may also become involved in the event of a loss by
presenting the loss to underwriters and negotiating on behalf of the assured.