TT Advocates Increased Use Of E-Commerce In Risk Management
- Date: 10/04/2002
10 April 2002
Switching claims handling and processing from manual to online transaction offers insurance companies and their insured an opportunity to raise the quality and the amount of business they conduct, as well as improving the speed at which they do it, says Mark Holford, Director of eBusiness, Thomas Miller & Co. Ltd., managers of TT Club.
Speaking at the Port Logistics conference in Amsterdam this March, Holford did, however, offer words of caution to his fellow insurers about the problems associated with e-commerce. He emphasised the necessity for those operating in transportation to ensure that their own insurers understood their industry and thus were capable of negating the associated risks.
The world is increasingly communicating via the internet. Customers are used to the ability to access suppliers in any country, in any time zone, via their website and are increasingly comfortable with transacting business through electronic means. The insurance market too is benefiting from the instantaneous communication, fast response times and real time tracking offered by on-line services and which is helping to speed claims processing. This increase in speed inevitably helps reduce associated costs – a bonus for insurers and customers alike.
Perhaps the “unseen” benefit of e-commerce lies in its accuracy. As part of a larger, integrated supply chain, e-commerce enables all parties in a transaction to share information, without the necessity for re-keying and thus eliminating much of the risk of human error.
The transport sector itself is becoming increasingly committed to the e-commerce route as exemplified by US railroad CSX, who is aiming to transact 75 per cent of its business on-line by the end of 2002. In addition leading IT consultant, Cap Gemini predicts 20 per cent of global shipping communications will be conducted via the internet by 2004.
In an industry whose very survival depends on its ability to evaluate and manage risk, it is inevitable that insurers are busy assessing what difficulties may arise through the use of e-commerce systems.
Holford highlighted two kinds of insurance risk in the e-commerce field: that emanating from process and operation, resulting in liability, and that resulting from a technical fault or breach of security, which leads to loss to the company itself.
He listed a company’s liabilities for errors or omissions arising from data entry and the responsibility for malicious or wrongful acts including virus attack to a computer system. Also included on the “risk list” were violations of customer privacy and the onus to ensure the safeguarding of intellectual property. And, as with any company which places its eggs in the e-commerce basket, there is always the potential for a complete failure of the system itself.
Choosing the right partner
Holford emphasised that in the electronic business, the challenge is to anticipate risk, not just hope it never happens. In order to achieve this, he said, it is vital that a company’s insurer understands the industry in which it is working and is therefore in a position to evaluate what risks apply.
TT Club offers specialist insurance to the transportation industry, which is beset by a huge diversity in the kind of liabilities arising from its day-to-day business, from misdirection of cargo, injury or death of a worker or member of the public, to loss of a ship and the ensuing interruption to business.
TT Club is combining its expertise in the transportation field with a specialist e-commerce service, utilising so-called “e-tools” for risk management. One such “e-tool” is ClaimsTrac, a secure and private database of each Club Member's claims, which can be accessed by the Member or their broker at any time. Naturally, Members only have access to their own claims database.
The benefits offered by ClaimsTrac include: access to real time data, giving the Member the latest claim information within minutes, rather than a daily refresh; extra claim specific information; a 90 day activity log showing new claims, movements on payments, estimates and file closure; the ability to create claims reports and download them; and access to an analysis tool, which enables Club Members to interrogate their information in a variety of ways.
Note to editors:
The TT Club provides liability and equipment insurance to ship operators, stevedores, terminal and depot operators, port authorities, logistics providers, freight forwarders and other transport operators in 150 countries. The TT Club insures 70% of the world's container fleet, over 2,000 ports and terminals worldwide and more than 4,000 transport and logistics operations around the globe. The Club's directors are drawn largely from the membership and have significant experience within the transport industry. TT Club is the transport and logistics industry's leading provider of liability and associated insurance and risk management products. To maintain this position the TT Club will continue to maximise its value-adding process with innovative concepts such as TTXpress.com, ThruCargo, TTe-claims and Claimstrac.
For further information please contact:
Tel + 44 (0)20 7204 2642
Michael Haig and Peter Owen, ISIS Communications
Tel +44 (0)1737 248300
A full archive of all TT Club news releases and photographs is available from the ISIS Communications Press Room at www.isiscomms.com