Insurers globally, including Nigeria, are seeing uptake in marine cargo business on the back of increased demand by pharmaceutical companies and institutions involved in importation of COVID-19 vaccines.
Marine cargo insurance covers the risks of loss, damage, expense and liability of goods during transportation from one place to the other, either by air, water or land.
A standard marine cargo policy covers all risk of physical loss or damage from any external cause while the goods and/or merchandise are in the ordinary course of transit, and this is expected to continue as rollout becomes critical with variants of the pandemic taking toll on countries.
The COVAX Facility announced in February that it was going to deliver around 90 million doses of COVID-19 vaccines to the African region in the first quarter of 2021, and committed to providing up to 600 million doses to the region by end-2021 to cover 20 percent of the population.
Nigeria in March received nearly 4 million doses of the COVID-19 vaccine (AstraZeneca), shipped via the COVAX Facility, a partnership between CEPI, Gavi, UNICEF and WHO.
Supo Sogelola, executive director, Law Union & Rock Insurance plc, now Tangerine Insurance, confirmed in a telephone interview that Nigerian insurers had been involved in providing marine cargo insurance for import of COVID-19 vaccines into the country.
According to Sogelola, there is a provision in the law that importation of cargo into the country must be insured by local insurers. “So, we have been part of the importation of COVID-19 vaccines, and this is expected to rise as states begin to place orders for the vaccines for their citizens.
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“My company is involved with other insurers,”Sogelola said.
Meanwhile, experts at Allianz Global Corporate and Specialty (AGCS), with a subsidiary in Nigeria, and one of the insurers that have played big in the space, share their experience working with clients to ensure the safe transit of sensitive pharmaceuticals.
Damon Finneran, senior Allianz Marine Risk Consultant,and Brian McClintock, Pharma Global Practice Leader and Cargo AGCS, in a question and answer response addresse the distribution process, some of the inherent risks, what commercial insurance covers, how the COVID-19 vaccine distribution differs from other pharmaceutical distributions and what the pharmaceutical insurance renewal market might look like.
According to them, Allianz Global Corporate and Specialty has a number of assureds in the pharmaceutical industry ranging from the manufactures to the distribution of vaccines globally.
“A successful vaccine distribution process in our mind starts with the transportation of the raw materials — Active Pharmaceutical Ingredients (API) — that make up the vaccine all the way to the point of injection into the individual receiving the dose of the vaccine.
“Our goal as an insurer of this cold chain from start to finish is to have no loss of product as a result of temperature deviations, security breaches or simply physical damage during transit,” according to Allianz Global.
To the experts, the logistics and supply chain process of a vaccine are substantial. This can involve multiple methods of transit and storage ranging from specialty integrated transport providers that move ultra-cold products that can be fragile during transit and requiring a narrow temperature range that it ships within before it begins to degrade the potency of the vaccine.
Finneran and McClintock say additional methods of transit will include trucking in conjunction with air, and with more stable vaccines, also by ocean.
“The primary concerns with the transport of vaccines are excursions (temperature deviations) during transit. Our global loss prevention team works with our assureds to minimise any excursions during transit. We have table top discussions identifying contingency plans if things do not go as planned during transit. Our loss prevention team makes themselves available any time to work with our assured and brokers to ‘save’ shipments that may become out of their temperature specification while delayed in transit,” they say.
On how the COVID-19 vaccine distribution differs from other pharmaceutical distribution, they say the company is involved with ultra-cold, 2-8 degree C and ambient shipments on a regular basis, the current COVID-19 shipments challenge us with their volume in conjunction with the strain the movement of the vaccines will put on the temperature controlled transportation industry through to last mile distribution.
On how long the COVID-19 business will last, they note, “We expect pharmaceutical type business/accounts renewals to be challenging in 2021. The marine cargo market is expected to continue to push for rate/premium increases and/or increased retentions and/or reduction in terms in the overall market but would expect that pharmaceutical and/or temperature sensitive type goods to be under greater scrutiny.”
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