Insurance Journal and MyNewMarkets.com track hundreds of new insurance products and services every year. In 2012, the industry launched numerous new coverages, enhancements, and services focused on a few specific areas: cyber/data breach; cargo; and weather. This 2012 new market summary details the product trends in these top three segments, and how insurance companies are responding. (View Part One)
#2 – CargoTheft Services
In 2012, carriers fought back against the cargo and equipment theft epidemic caused by the poor economy with resources and incentives from organizations like the National Equipment Registry (NER) and CargoNet.
Several carriers began offering discounts to companies that installed anti-theft tracking devices on their equipment or were more vigilant about reporting thefts, which reportedly helps increase the likelihood of the equipment being recovered.
“There is a huge lag in reporting and common sense tells you if you wait five days, the bad guys have five days on you,” said Anthony Canale, vice president of Verisk Crime Analytics in Jersey City, N.J. “When reports are taken and distributed in a timely fashion, the opportunity for recovery is higher.”
Verisk Crime Analytics, a member of Verisk Analytics, works with carriers to offer CargoNet and the NER. CargoNet was launched in 2009 to increase recovery rates of stolen cargo through secured and controlled information sharing among theft victims, the insurance industry and law enforcement. Verisk Crime Analytics works with the National Crime Bureau to dispatch information quickly to experts and law enforcement.
The NER works with law enforcement, the insurance industry and equipment owners to prevent heavy equipment theft and provide resources when a theft occurs. It launched a GPS tracking system last year called IRONwatch that equipment owners can attach to their expensive machinery. If the equipment is stolen, the device is activated and tracks where the equipment is to increase the likelihood of recovery.
According to information from CargoNet’s “Annual Cargo Theft Report”, theft reporting is improving, which could mean better bottom line results for carriers when 2012 is all said and done.
Helen Leonard, inland marine product leader for Allianz Global Corporate & Specialty in Richmond, Va. – one of the carriers who introduced insured incentives this year – says agents are encouraged when a carrier takes a proactive approach. “They are applauding that someone is doing something – not just getting out of this business but finding a way to make money and stay in.”
A few of the carriers who took advantage of theft reporting and recovery services this year were:
- RLI agreed to pay the $200 activation fee for the NER’s GPS tracking devices if insured’s buy the device at a cost of $400. Robert Schauer, president of RLI Marine in N.Y., said the device is a valuable underwriting tool and a great way to mitigate a pricing increase for clients who have a theft problem. “These are valuable assets,” he said. “The cost of getting a tracking device on the equipment is paid for ten times over the first time something gets stolen.”
- AGCS formed an agreement with its U.S. affiliate AGCS Marine Insurance Co. and CargoNet to waive an insured’s deductible of up to $5,000 if a theft is reported within one hour of discovery. Insureds of Allianz also receive a 20 percent discount on their CargoNet membership.
- Chubb and FreightWatch International will offer a 10 percent discount on real-time shipment tracking services to the carriers transportation insurance customers. FreighWatch tracks and monitors cargo and alerts law enforcement agencies when thefts occur through covert tracking devices.
- Markel joined CargoNet in June to assist policyholders in cargo theft prevention, response and recovery.