STOCK THROUGHPUT POLICIES

WHAT IS IT?
INTRODUCTION
A holistic insurance policy covering goods across the entire supply chain, from raw materials to final delivery.
IDEAL CANDIDATES FOR STOCK THROUGHPUT INSURANCE (STI)
1. Manufacturers with Global Supply Chains
Benefit: Covers raw materials and finished goods at all stages, crucial for operations
with storage and processing across multiple locations. Excludes manufacting defects.
COVERAGE HIGHLIGHTS:
2. Agricultural Exporters
Raw Materials: Coverage from acquisition through transport to processing.
Benefit: Protects against spoilage and damage not only in transit but also during
In-Process Goods: Protects items being manufactured or assembled.
storage, essential for perishable goods awaiting shipment.
Finished Goods: Includes items stored or in transit post-manufacture.
3. Retailers with International Suppliers
Transit: Covers all transport modes (sea, air, road, rail) against common risks.
Benefit: Ensures continuous coverage for goods from international suppliers, mitigating
Storage: Applies to goods stored anywhere in the supply chain.
risks during transit and warehouse storage.
4. Seafood Processors and Distributors
KEY FEATURES:
Benefit: Offers coverage for perishable seafood from catch to market, including crucial
Broad Scope: Eliminates coverage gaps by protecting goods at all supply chain stages.
storage periods, maintaining product integrity.
Worldwide Protection: Offers global coverage, essential for international operations.
5. Pharmaceutical Companies
Tailored Policies: Customizable to fit specific business needs and risk profiles.
Benefit: Provides comprehensive coverage for sensitive products requiring stringent
Cost-Effective: More economical than separate policies for different coverage areas.
control, from production through to delivery.
Simplified Claims: A single policy streamlines the claims process.
6. Technology and Electronics Firms
Flexible Terms: Adjustable coverage limits, deductibles, and valuation clauses.
Benefit: Extensive coverage for high-value components and products prone to theft and
Risk Management: Insurers provide advice and support to mitigate supply chain risks.
damage, supporting global supply chains.
7. Furniture and Home Decor Wholesalers
WHY IT'S ESSENTIAL:
Benefit: Covers large volumes of stock in transit and storage, offering financial
For businesses involved in manufacturing, trading, and distribution, STP provides a seamless, cost-effective
protection and peace of mind across the supply chain.
insurance solution that supports global operations and simplifies risk management across the supply chain.

STOCK THROUGHPUT POLICY (STP) VS. PURE TRANSIT INSURANCE (PTI)

FEATURE STOCK THROUGHPUT INSURANCE (STP) PURE TRANSIT INSURANCE (PTI)

Coverage Scope Comprehensive from production to delivery, including storage. Covers goods in transit only, with limited/no storage coverage.

Types of Risks Covered Broad: damage, theft, loss during transit, storage, handling. Focused: accidents, theft, loss during transit.

Duration of Coverage Continuous, throughout the supply chain process. Limited to transit duration, ends at destination.

Policy Integration Integrates with existing policies for seamless coverage. Standalone, targeting specific transit risks.

Flexibility Highly customizable to business needs and goods types. Less flexible, with terms centered around transit.

Target Audience Businesses needing comprehensive supply chain coverage. Businesses seeking specific transit coverage.

Cost Implications More cost-effective for extensive coverage needs across the supply chain. Potentially cheaper for transit-only coverage but may increase costs if additional policies needed.

STRATEGIES FOR ENSURING RENEWAL OF STP INTEGRATING SUSTAINABILITY INTO STP UNDERWRITING ASSESSING CLIMATE CHANGE IMPACT ON STP
1. Customized Insurance Solutions 1. ESG Risk Assessment Integration 1. Geographical Risk Analysis
Approach: Tailor policies to the unique needs of each business, focusing on their specific Approach: Incorporate ESG risk assessments, evaluating environmental impact, social responsibility, Approach: Evaluate policy-covered areas for climate change effects like rising sea levels and extreme
operations, supply chain, and risk exposure. and governance. weather.
Benefit: Demonstrates understanding and addresses specific client risks, enhancing renewal Purpose: Highlights ESG risks for mitigation and promotes sustainable practices in policies. Purpose: Allows precise risk pricing and strategy development by identifying high-risk areas.
likelihood. 2. Sustainable Supply Chain Evaluation 2. Historical Data Review
2. Competitive Pricing Approach: Examine the insured's supply chain for environmental practices and sustainable material Approach: Analyze past climate data and claims for weather-related damage trends.
Approach: Maintain attractive premiums through regular market analysis and cost use. Purpose: Aids in predicting future risks and adjusting policy terms based on historical patterns.
optimization. Purpose: Encourages adoption of sustainable supply chains, reducing environmental risks and claim 3. Climate Models and Predictive Analytics
Benefit: Balances cost with coverage quality, facilitating easier renewal decisions. potential. Approach: Use advanced models and analytics to forecast climate trends and impacts on supply chains.
3. Risk Management Support 3. Climate Change Impact Analysis Purpose: Provides insights into future climate events' likelihood and severity, assisting in risk assessment.
Approach: Offer risk management advice and services, including assessments and training. Approach: Assess the impact of climate change on operations and supply chain, focusing on 4. Supply Chain Vulnerability Assessment
Benefit: Reduces client risk profiles, fostering a partnership approach and supporting renewal. vulnerabilities. Approach: Assess the insured's supply chain for vulnerabilities to climate change, like extreme weather
4. Transparent Communication Purpose: Guides product development to encourage resilience and adaptation to climate change. impacts on transportation.
Approach: Keep clear, open communication lines, explaining policy terms and any changes 4. Green Incentives and Discounts Purpose: Identifies vulnerabilities, guiding risk mitigation recommendations and coverage customization.
thoroughly. Approach: Offer discounts or incentives for implementing sustainable practices. 5. Engagement with Climate Experts
Benefit: Builds trust and ensures clients feel valued, crucial for renewal. Purpose: Motivates greener practices, reducing risk profiles and aligning with sustainability goals. Approach: Collaborate with experts for the latest climate change research and its industry impacts.
5. Responsive Claims Service 5. Collaboration with Sustainable Businesses Purpose: Ensures underwriting aligns with current climate risk understandings.
Approach: Provide efficient, fair, and transparent claims assistance. Approach: Prioritize underwriting for businesses committed to sustainability. 6. Risk Mitigation and Adaptation Strategies
Benefit: Positive claims experiences significantly influence renewal decisions. Purpose: Supports environmental stewardship and social responsibility, extending impact beyond Approach: Evaluate insured's strategies against climate change, such as alternative supply chains or
6. Regular Policy Reviews and Adjustments insurance. climate-resilient packaging.
Approach: Periodically review and adjust coverage based on changes in business operations 6. Transparency and Reporting Purpose: Proactive climate risk management can lower risk profiles, affecting policy terms.
or risk exposure. Approach: Maintain transparent reporting on sustainability efforts and ESG performance. 7. Regulatory and Market Changes
Benefit: Ensures policies remain relevant and protective, reinforcing their value. Purpose: Builds stakeholder trust and promotes continuous ESG practice improvement. Approach: Monitor changes in regulations and market trends related to climate change.
7. Value-Added Services 7. Continuous Learning and Adaptation Purpose: Adjusts insurance coverage in response to regulatory shifts and market dynamics.
Approach: Extend services beyond insurance, like access to risk management tools or legal Approach: Stay informed on sustainability trends, risks, and opportunities. 8. Continuous Monitoring and Review
advice. Purpose: Ensures underwriting practices remain relevant and responsive to emerging sustainability Approach: Continuously monitor climate risks and the effectiveness of mitigation strategies.
Benefit: Enhances client satisfaction and loyalty by adding policy value. issues. Purpose: Ensures ongoing relevance and effectiveness of insurance coverage in the face of evolving
8. Loyalty and Incentive Programs 8. Sustainability Criteria for Investments climate change impacts.
Approach: Offer renewal incentives, such as premium discounts or enhanced coverage for Approach: Apply sustainability criteria to investment strategies supporting insurance policies.
claim-free periods. Purpose: Aligns investments with ESG principles, reinforcing commitment to sustainability.
Benefit: Rewards loyalty and encourages policy renewal.
9. Market Intelligence and Advisory

LEVERAGING RISK MANAGEMENT FOR BETTER INSURANCE PREMIUMS STOCK THROUGHPUT UNDERWRITING CHECKLIST
Approach: Share insights on market trends, regulatory changes, and emerging risks.
Benefit: Positions insurers as valuable advisors, increasing the likelihood of policy renewal.
Overview: Employing these strategies helps insurance companies not only secure policy renewals
1. Risk Assessment and Documentation Business and Operational Information
but also deepen client relationships, leading to higher retention rates and mutual success.
Action: Perform thorough risk assessments focusing on supply chain and goods in transit/storage. Business Profile: Nature of the business, history, and experience in the industry.
Purpose: Establishes a baseline for risk management effectiveness and identifies improvement Financial Health: Review of financial statements to assess the company's financial stability.
areas. Supply Chain Overview: Detailed description of the supply chain, including key partners, countries of operation, and
2. Implementation of Risk Management Measures logistics.
CUSTOMIZING STP: KEY CONSIDERATIONS Action: Enact specific measures to mitigate identified risks, such as security upgrades and safety Goods Description: Types of goods being insured, including their values, susceptibility to damage, and any special
protocols. handling requirements.
1. Nature of Business and Goods Risk Exposure and Management
Purpose: Shows proactive efforts to minimize claims, demonstrating responsibility.
Assess goods' susceptibility to damage, theft, or spoilage. Special goods may need extra Risk Management Practices: Evaluation of the insured's risk management and loss prevention strategies.
3. Data Collection and Analysis
coverage. Past Claims History: Analysis of previous claims to identify patterns or recurring issues.
Action: Gather data pre- and post-implementation of risk management strategies to track incident
2. Supply Chain Complexity External Risks: Assessment of external risks such as political instability, natural disasters, or regulatory changes
rates and loss severity.
Evaluate the supply chain's complexity, including transit points and storage facilities, to affecting the supply chain.
Purpose: Highlights the effectiveness of risk management in reducing claims frequency and
ensure comprehensive coverage. Storage Facilities: Information on storage facilities used throughout the supply chain, including security features,
severity.
3. Geographical Considerations environmental controls, and location risks.
4. Financial Impact Analysis
Consider risks associated with geographical areas of operation, such as political instability or Policy Details and Requirements
Action: Assess the financial savings from risk management by comparing costs before and after
natural disasters. Coverage Requirements: Detailed understanding of the coverage needs, including limits, deductibles, and any
measures are in place.
4. Storage Duration and Conditions specific endorsements or exclusions.
Purpose: Provides concrete financial evidence of risk management benefits, supporting the case
Assess how long and under what conditions goods are stored, adjusting coverage for Duration of Coverage: Assessment of the policy period required and any seasonal fluctuations in coverage needs.
for lower premiums.
extended periods or extreme conditions. Valuation of Goods: Methodology for valuing goods at various stages of the supply chain, including considerations
5. Benchmarking
5. Transportation Modes and Routes for market value fluctuations.
Action: Compare the company's risk profile and insurance costs with industry norms or similar
Identify transportation methods and routes, noting higher risks associated with certain Transportation and Logistics
businesses.
modes or areas. Modes of Transport: Details on the modes of transport used (e.g., sea, air, road, rail) and the associated risks.
Purpose: Identifies if current premiums are higher than average, bolstering the argument for
6. Value Fluctuations Packaging and Handling: Evaluation of packaging standards and handling procedures to minimize damage during
reductions.
Account for potential value changes of goods in the supply chain, ensuring flexible coverage. transit.
6. Presentation to Insurers
7. Regulatory Requirements Transit Routes: Analysis of transit routes and any specific risks associated with these routes, such as piracy or
Action: Create a detailed presentation for insurers, showcasing risk assessments, management
Ensure compliance with insurance regulations in all operational regions. geopolitical tensions.
actions, and their impacts.
8. Risk Management Practices Third-Party Logistics Providers: Information on any third-party logistics providers, including their insurance
Purpose: A data-driven presentation can effectively argue for premium reductions.
Evaluate existing risk management measures for potential impact on insurance terms. coverage and risk management practices.
7. Negotiation
9. Claims History Legal and Compliance
Action: Negotiate with insurers using the quantified impacts of risk management as leverage.
Review past claims to identify and address specific vulnerabilities in the policy. Regulatory Compliance: Verification of compliance with international and local regulations affecting the
Purpose: A demonstrably lower risk profile logically supports the case for reduced premiums or
10. Financial Capacity and Risk Appetite transportation and storage of goods.
better terms.
Consider the business's ability to absorb losses and its risk tolerance when deciding on Contractual Obligations: Review of contracts with suppliers, customers, and logistics providers to understand
8. Continuous Improvement and Monitoring
deductibles and limits. insurance obligations and liabilities.
Action: Maintain an ongoing commitment to risk management, regularly informing insurers about
11. Additional Coverage Options Additional Considerations
new measures and impacts.
Explore extra coverage for cyber risks, business interruption, or political risks as needed. Emerging Risks: Consideration of emerging risks that could impact the policy, such as cyber threats to logistics
Purpose: Builds a consistent track record of risk management, aiding in favorable term
Purpose: Tailoring a stock throughput insurance policy with these considerations ensures optimal systems or environmental regulations.
negotiations.
protection tailored to the unique risks and needs of the business. Sustainability Practices: Insight into the insured's sustainability practices, especially if they impact risk exposure
(e.g., use of eco-friendly packaging materials that may be more susceptible to damage).

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