In today’s rapidly-evolving market, insurance brokers have to face a broad range of challenges when it comes to issuing cargo cover, but especially stock throughput policies. From inaccurately-priced risk, to slow, cumbersome processes which can’t keep pace with the just-in-time supply chain, there’s no shortage of room for improvement. With more than 60% of shipments in transit still under or uninsured, it’s vital that brokers take steps to clear any obstacles which could discourage the freight community from obtaining the right coverage.

The good news is, there are solutions available to solve almost all of these issues, if you know where to look. So I’ve rounded up some of the most common problems insurers face, along with the most appropriate solutions below.

Problem #1 - Slow manual workflows

Solution: An AI-powered insurance platform

A core problem for brokers is the painfully slow, manual method of calculating quotes for stock throughput policies. With so many variables at play, pricing the exposures of an Insured's full supply chain is a long and complex process. This waiting period is a luxury many shippers and carriers don’t have, so it’s also one of the main contributors to the underinsurance crisis; they’d likely prefer a load to be on time and uninsured to delayed and properly covered.

A standard stock throughput policy generally takes a week or more to quote. Traditional insurers have to use third-party natural catastrophe modeling to calculate the Average Annual Loss (AAL) while the goods are in storage, and can wait up to 72 hours to hear back before incorporating that data into their quote.

By contrast, Loadsure’s AI-powered platform offers almost instantaneous Nat Cat modeling for domestic locations, so it can generate a quote for an all-risk policy like Huron (Ocean Cargo and Stock Throughput) in a few minutes. Not only does this save brokers a huge amount of time that can be spent on other tasks, but it also enables them to better serve their customers with more versatile coverage. We even provide data insights to our partner brokers and assureds for active risk management on the quality and risks at their locations.

Problem #2 - Inaccurate pricing

Solution: The dynamic pricing model

Inaccurate pricing is also a big contributory factor in the global underinsurance crisis.

For decades, brokers have been relying on conventional methods to price these risks which creates an array of quoted premiums and deductibles - especially for goods in storage. Underwriters will typically price CAT exposures based on the total portfolio of locations an insured has, which makes sense for global clients with a lot of locations, but for smaller clients with <10 locations this model yields an inaccurate - and unfair - price.

Enter the dynamic pricing model. A platform powered by an AI-engine will not only carry out that quotation process in minutes, but it will generate an incredibly accurate price. Loadsure analyzes the risk of every location and transit uniquely, which gives brokers and clients access to the best possible program; priced on their specific exposure - no more and no less.

Policies priced like this keep customers happy - and make sure they keep coming back.

Problem #3 - Discouraging minimum premiums

Solution: Sustainable premiums

The traditional insurance process is time consuming for underwriting teams, who are forced to add a high minimum premium to profitably write the business, or to ignore or mishandle smaller accounts, which inevitably discourages brokers and Insureds from pursuing this option. This results in clients relying on their property policy for small domestic transit sub-limits or relying on the liability of their carriers and brokers, this means there’s more underinsured freight in transit. For SMEs in particular, who might only be sending occasional LTL shipments, a high minimum premium may not seem cost-effective to insure a small volume of goods.

The size of your customers business should not be a barrier for proper protection or access to fair pricing. The modern, innovative dynamic pricing model enables brokers to offer sustainable premiums that their clients can actually afford, likely turning them into repeat customers.

Problem #4 - Conventional claims processes

Solution: Automated claims

Conventional claims handling simply isn’t suitable for the reactive demands of the logistics industry. Brokers need resources and flexibility to focus on the more complex cases in their load, but are often kept busy by the lengthy procedures and paperwork required for very standard claims. It’s also a big problem for the insured. Whether it’s in transit or in storage, cargo loss is an occupational hazard, and although larger corporations can likely absorb a temporary loss, SMEs who lose a single LTL shipment may struggle to find (and fund) replacement stock while the claim is settled.

That’s why tech that automates the claims handling process is the future. With an automated system, users can gain a comprehensive view of their claim’s entire lifecycle, from the moment of submission to the final outcomes, all unfolding in real time. This will expedite the process of reaching settlement agreements and issuing payments, which in turn nurtures customer loyalty and enhances satisfaction.

Problem #5 - Changing customer expectations

Solution: Modernized systems and efficient communication

In the last few years, the transport and logistics industry has faced unprecedented supply chain disruption. With increasingly diverse risks to manage, customer expectations of freight insurance brokers are shifting; their inquiries are getting more complex, while communication is more vital than ever.

Opting to integrate modernized systems into your practice can make this change far more manageable. For instance, the transparency of automated claims tech keeps every party fully informed, minimizing claimant-broker contact and freeing up brokers to work on other priorities. Even issuing stock throughput policies can be a frictionless process with a revolutionary solution like Loadsure - an intuitive platform which gives the insured maximum control over their coverage, with full visibility of their broker.

Despite the availability of several game-changing InsurTech solutions on the market, these pain points continue to surface time and time again in the cargo insurance market.

Are you experiencing any of these issues first-hand?

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