Insurance without fear: how yacht insurance brokers work
Theory and practice

Insurance without fear: how yacht insurance brokers work

Interview with the director of Russia's first broker specializing in yacht insurance
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Yacht and boat insurance is one of the most specific areas in insurance. As in any business, there are nuances and subtleties, which take a lot of time to study, which is due to more than two hundred years of history of this industry.

The most important aspect of yacht and boat insurance remains the choice of an insurance company. Today, in conditions of constantly changing market, where the number of Russian and foreign players is constantly growing, it is very difficult to make the right choice: to determine the required volume of insured risks, to find the best insurance conditions, to get a guarantee of payment if the Insurer's requirements are met, and even more so to understand the whole variety of rules of yacht insurance.

For the solution of these problems there are insurance brokers - the companies rendering professional support to clients on insurance questions, beginning from a choice of the insurer and finishing conducting insured events on the side of the client. In Russia this phenomenon is new: the first broker specializing in yacht insurance appeared only in 2015. It became Marine Services Group, whose employees have been working in leading Russian marine insurance companies since 1998. We talked to Yegor Kanunnikov, the director of Marine Services Group, about the peculiarities of yacht insurance broker's work.

- Yegor, can you tell us why you decided to become a broker? After all, you have a great experience in yacht and boat insurance and could continue your career in insurance companies?

Since 2004, my colleagues and I have been developing yacht insurance in Russia. It was under our leadership that this product was launched, first in Moscow and the Moscow region, and then in the entire post-Soviet space.

For more than 12 years we have built a system of insurance for small vessels in several major insurance companies, but most importantly, we have been able to create a product that is understandable and convenient for any yachtsman who has not previously encountered yacht and boat insurance.

By 2015 we have accumulated a lot of invaluable experience in marine insurance issues. This has made it possible to realize a long-held dream - to bring to the yacht insurance market a strong player, helping to solve a wider range of problems and issues than an ordinary insurance company.

That's when it came to understanding that we would act as a specialized insurance broker in the market.

- Why do we need insurance intermediaries at all? Isn't it easier to go directly to an insurance company?

An insurance broker is not limited to one insurance company, which means that he can choose the best coverage based on market conditions. We give our clients a choice based on our experience, knowledge of the market and understanding of yacht insurance specifics.

Today the insurance market consists of several participants: the owner of the yacht or his representatives; the insurance broker; the Insurer (and/or the person representing interests of the Insurance Company).

Around the world, most insurance contracts are concluded with the help of insurance brokers. Their names so often flicker in insurance transactions that they are often taken for insurance company names.

There is a quite reasonable explanation for this.

First, a person far from the insurance market is quite difficult to understand the diversity of the offer. Even a typical product each insurer has its own features. And only a professional will help to understand all the nuances and subtleties.

Secondly, only from a professional representative of the industry you will be able to get complete and reliable information about the situation in the insurance market as a whole and positions of each insurance company separately.

Thirdly, the broker is on the client's side, therefore, the process of negotiations and agreements will always be directed exclusively towards strengthening the client's position and improving the conditions offered to him.

In addition to all the above, we in our company assist our clients in a wide range of issues: we fully carry out the work of loss management on the client's side (working out the strategy of behavior, communication with surveyors, insurance company, lawyers), develop the most advantageous insurance system with the widest possible insurance coverage, and even help with the sale and purchase of new boats for our clients.

- If we have already dealt with the questions of benefit for the client, then tell us a secret, what does a broker still earn on?

An insurance broker is a unique player in the insurance market.

Historically, the broker always works in the interests of the client, but pays the insurance company. It may seem absurd to many people, but here you just need to look at the world through the eyes of the insurer.

An insurance broker is a full representative of the client. The client, entrusting his property to the broker, removes the questions on annual search, definition and coordination of new insurance conditions. To the client it is enough to hear from the broker the offer and to send acknowledgement, and the broker in turn places risk and prepares all documents.

The insurance company with understanding concerns broker work, after all for the insurer process of dialogue with the broker globally simplifies all procedure of insurance as they speak one professional language.

But the most important thing is that a well-known broker has a large portfolio of clients, which means that it can seriously strengthen the position of the insurance company itself due to the newly attracted volume of risks.

This is how the concept of commission was born, the form of compensation that a broker receives from an insurance company for insured clients.

- Where is the guarantee that receiving money from the insurance company, the broker will not play on its side, including in the policy of the client unnecessary services and artificially inflating its value?

Such a problem can certainly arise if you apply directly to the insurance company, because it is interested in increasing fees. But the success of an insurance broker, especially in such a competitive market as yachting, depends largely on his reputation. Besides the volume of insured risks, the client always looks at the price. Our task is to choose an optimal offer, i.e. to place risks in a reliable company with minimum premium and optimal franchise (franchise - non-refundable part of loss).

And we should not forget that like any legal entity, the broker is responsible to the client.

The liability of our group is also insured by a reliable insurance company.

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