Cargo and transport reinsurance

This line combines reinsurance of cargo in transit, marine, river and aviation risks, rail and road transport, and the liability of carriers and freight forwarders. For Kazakhstan it is especially important: the country lies on the transit routes between Asia and Europe, and cargo travels by rail, by road, across the Caspian Sea and by air. The high value of individual consignments, vessels and aircraft, and the risk of accumulation of losses in ports and warehouses, make reinsurance a necessary part of the insurer's work in this segment.

Which risks are reinsured

  • cargo — in carriage by any mode of transport, including transshipment and intermediate storage;
  • hull of sea and river vessels, including those under construction;
  • aircraft hull and the air carrier's liability to passengers and third parties;
  • rail rolling stock and vehicle fleets;
  • liability of carriers, freight forwarders and terminal operators.

How protection is structured

Portfolios of cargo and motor vehicles are usually protected by treaty programs — a quota share or surplus with limits per vessel, per shipment or per storage location. Large vessels, aircraft and atypical carriage (project cargo, oversized cargo, dangerous goods) are placed on a facultative basis. Accumulation of losses — for example, when cargo under many policies is gathered in one port or one warehouse — is limited by excess of loss per event. Aviation risks are traditionally placed on the specialised international market with a high concentration of expertise.

Underwriting features

For cargo, the reinsurer assesses the nature of the goods, packing, routes, modes of transport, transshipments, storage periods and the qualifications of carriers. The terms of cover are important: "all risks" or a limited list of perils, and the international standard clauses applied. For vessels and aircraft, the type, age, class, trading or operating area, the experience of the crew and operator, and maintenance matter. For liability, the legal regime of carriage and the international conventions applicable to the route.

What is usually excluded

  • the inherent nature of the cargo, insufficient packing, ordinary leakage and shrinkage;
  • delay in delivery and consequential losses;
  • war risks and strikes — unless included by a separate clause;
  • unseaworthiness of the vessel known to the policyholder, breach of the rules for carriage of dangerous goods;
  • sanctions restrictions — reinsurers do not accept risks that violate applicable sanctions regimes.

Key terms

  • limits per conveyance, per shipment, per storage location and per event;
  • deductibles, the reinsurer's share and the cedent's retention;
  • reinsurance commission and settlement procedure;
  • territory and routes, war and sanctions clauses;
  • the procedure for notifying losses, and the reinsurer's participation in subrogation against carriers.

What data is needed for a quotation

  • types of carriage and characteristics of the objects — cargo, vessels, aircraft, rolling stock;
  • routes and territory, transshipment and storage locations;
  • sums insured and limits, annual volume of shipments;
  • the existing insurance terms and loss statistics.

How Polis Re helps

The Polis Re broker structures information on shipments, selects reinsurers specialising in marine, aviation and cargo risks on the domestic and international market, agrees clauses, limits and price, and supports settlement and subrogation. For cargo insurance for business see the cargo insurance calculator. To get an offer, send a reinsurance request.