3 Ways Argo Marine Is Helping Insurers Overcome Supply Chain Instability - Argo Group

3 Ways Argo Marine Is Helping Insurers Overcome Supply Chain Instability

To help insurers combat instability, Argo Marine is innovating in ways other carriers cannot.

The pandemic dramatically destabilized the global supply chain, and inland marine insurers are still reeling. “I’ve not seen anything like what’s going on right now,” says Mitchell Valadez, Assistant Vice President of Underwriting at Argo Marine.  

“If an insurance policy was written six months ago, the exposure base can be drastically undervalued,” says Valadez. For example, a trucker’s policy covering the physical damage of their tractors may have been written with new tractors scheduled at $150,000. Replacing that same tractor today could cost upwards of $200,000.  

To help insurers combat instability, Valadez says Argo Marine is innovating in ways some other carriers cannot.  

Here are three ways Argo is helping insurers amid uncertainty.

1. Adding proprietary products

The Marine team is creating new proprietary forms, such as an encompassing logistics form, to meet the changing needs of insureds during this pressing time of backlogs, inflation, and rapid change. These new products adjust to our insureds’ needs, offering broadened coverage and flexibility for multiple lines of coverage associated with logistics – all on one policy form. 

2. Adjusting reporting cadence and valuations

Traditionally, valuations are reported on a yearly basis. But with the meteoric inflation caused by supply chain disruptions, that practice has led to devastating losses for policyholders and unprofitable books for agents.  

By allowing monthly or quarterly valuations, Argo Marine helps agents and policyholders weather market and supply chain fluctuations. “As the valuations change in real time, they can match them,” says Valadez. “That way they’re not underinsured or over-insured.” 

Valadez says his team is also considering how the valuation clause affects the claims settlement of motor truck cargo legal liability coverage. “As the value of goods fluctuates, we need to be sure our coverage meets the needs of our truckers and their clients,” he says.  

The team is always striving to understand client needs and how inflation is affecting them. This involves working closely with our claims and legal teams as well as industry insiders. 

“Many of our brokers are involved in trade groups and encourage participation in panels and discussions,” reports Valadez. “This deep relationship ensures we react quickly to economic forces such as inflation.” 

3. Providing flexibility for delayed construction projects

Valadez says agents are switching to specialty carriers like Argo Marine because some other carriers aren’t flexible enough to adjust to the current reality.  

For example, a builder’s risk policy may need to be extended due to supply chain issues causing project delays. “Some carriers won’t extend projects, which forces insureds to get a midterm policy from another carrier. Essentially, they’re paying double!” 

Argo Marine doesn’t operate that way. “We’re not going to abandon you,” says Valadez. “Our underwriters have full authority to work with the project as needed. We’re not going to have any hard cut-offs on extensions. We base it on the parameters for each account.” 

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