StilFresh Recoveries reports that global players like Allianz, AIG, AXA and regional big shots like Santam Insurance, SAHAM Assurance and Hollard Insurance are all making significant strides across Africa. With the low penetration levels and the dependence of local traders on luck rather than risk calculations, we look at some of the areas which could help marine insurers be more profitable in Africa.
Underwriting & Claims teams
Understandably, given the low insurance penetration levels in Africa, many local players tend not to have specialists marine or transport claims handlers. As such, we see a lot of cases that are being jeopardised for reasons as “obvious” as prescription periods or what is generally known as time bar.
In a few good cases, there are some which turn out to be against the same company. An example of such a scenario is a road accident which results in damage to cargo. Company A holds the GIT cover but also the HGV liability cover. This information is readily available to the underwriting team but not the claims guys.
Time is always of the essence when dealing with marine or transport claims. We recently worked on a case of importation of BigBags which were to be later transported inland to a neighbouring country. We were appointed to act on this case 8 months after discharge from the carrying vessel. We brought up the difficulties associated with such delays and the feedback we got was that the claims team is still working on settling the claim.
The cause of damage to the cargo was mechanical tearing of the BigBags. The survey report which was drawn up after the cargo had reached its final destination, attributed the damage to discharge operations at the port.
Globally, we are facing a soft marine insurance market but particularly so across Africa. Insurers thus have to look at other avenues of “collecting premiums”.
A key first step will be training. We hold regular workshops and seminars in French and English across the continent.
During these workshops, we talk on practical issues such as:
- Which convention is applicable in which African country and how is it interpreted by the local courts.
- We look at some of the behavioural changes which can help the claims handler to better protect the interest of the insurer.
- We advise local teams on some of the necessary first steps to be taken once a claim arises and its practical implications.
There is an urgent need for marine underwriting teams and claims teams to communicate with each other. If not for a full understanding of the various accounts or portfolios, it is important for a better management of claim payouts.
Lastly, recover! 20% of subrogated claims are potentially recoverable. The implication of this is that an insurer has the potential of improving their bottomline by 20%. So do not miss any opportunity to pursue a recovery. With the current state of roads and ports in many countries in Africa, goods are very likely to be damaged in accidents or delays due to congestions.
Article by: Kingsly Kongnyuh Kwalar MD at StilFresh Recoveries