Dawn of a New Era in Risk ManagementWed, 01/20/2016 - 08:49
“The structure of insurance legislation in Mexico creates a protectionist market whereby the choice of insurance carriers for organizations operating in the country is restricted to domestic insurance companies,” voices Adam Howe, Director of AMMIS Risk Solutions. He adds that few Mexican insurance companies can retain these risks and have to seek support from international markets by way of reinsurance in order to be able to offer terms. This generates a lengthy chain of intermediaries, which has historically been untamed and expensive. Anglo Mexican Marine Insurance Services, also known as the AMMIS Group, is an independent insurance broker with risk transfer consultancy services that specialize in the Mexican marine and energy industries. Some of the firm’s areas of expertise include insurance for physical damage and liabilities arising from the operation of marine property (vessels, rigs, docks, piers and marine installations), onshore and offshore operations, and oil and gas energy installations.
Howe explains that when AMMIS was formed, a vast array of internationally available specialty insurance products was not readily accessible to the Mexican marine and offshore energy industry. In addition, foreign companies working in Mexico needed assistance with the rules, laws, and regulations shaping the local insurance industry. The situation has not changed significantly, and Howe says AMMIS can leverage on its international network to adapt existing global insurance programs to Mexico and offer specific coverages required for operations in the country. AMMIS guides its clients in the selection
of suitable insurance carriers for the risk in question, the disclosure of material information to insurers, the negotiation of policy prices, and coverage levels, among others. The firm collects, collates, analyses, and prepares the requisite data for presentation to insurers and their reinsurers, assisting the client to comply with its Duty of Disclosure to underwriters. AMMIS and its partners have both international and local experience in all areas of the intermediary chain, minimizing the amount and cost of intermediation and accessing coverage which compares favorably to that available in the international markets. Howe says the Mexican insurance market has not developed at the same speed as the Mexican marine and offshore industry and, as such, AMMIS’s approach proves a valuable instrument for clients.
Howe acknowledges that lengthy intermediary chains can frustrate clients. With this in mind, AMMIS commits to detailing the intermediaries involved and their roles to ensure that no additional intermediation costs are passed on to policy holders. In addition, AMMIS provide premiums with no addition intermediation fees, as it has several agreements with insurance companies and brokers operating in Mexico. “In a globalized world, there is no reason why the Mexican Marine and Energy Industry should be at a price disadvantage against its international competitors as a result of complying with local insurance practices,” Howe expresses.
In Howe’s experience, the Mexican oil and gas industry is changing its attitude towards risk management advisory services. “Over the past 15 years, many PEMEX contractors looked upon insurance as just another expense generated by their contract with the NOC or with the owner of their chartered vessel. They would buy the minimum limits and conditions required to comply with their contracts at the cheapest price with little, if any, consideration for the risk that their operation and the contracts expose themselves to.” Now he feels optimistic because he sees an increased focus on risk management and mitigation. “Clients want to understand what kind of coverage they have, as evidenced by the fact that responsibility of insurances has shifted from a company’s finance division to the legal department. Cost remains an extremely important factor for clients, but this change displays an interesting paradigm,” comments Howe. In his view, these changes result from maturing process within the local industry with an increased focus on corporate governance.