Aiming to Stop Cargo Theft, CargoNet Expands Its Insurance Membership
CargoNet, a national initiative managed by based ISO (Jersey City, N.J.) that supports information sharing between parties concerned with cargo theft, gained another key insurer participant. Chicago-based CNA ($7.8 billion in annual revenue) joined the network as a charter member in February 2010.
Conceived in early 2009, the network seeks to achieve critical mass of insurers, retailers, manufacturers, transportation companies and law enforcement, whose cooperation on CargoNet can facilitate loss prevention, risk mitigation and investigation of criminal activities, according to Maurizio Scrofani, managing director, CargoNet. "CargoNet's membership is steadily expanding, helping the network grow to be more effective, as well [to be] as an enabling tool and a source of reliable data for the significant cargo theft problem and its ramifications for a variety of supply chains," he comments.
Central Database
CargoNet provides a central database and related functionality that enable the immediate reporting of cargo theft to law enforcement professionals nationally, as well as secure and confidential information sharing among other concerned parties, including insurers, according to Scrofani. The CargoNet initiative began in early 2009 with collaboration between ISO, which provides risk information services to the property/casualty industry, and the National Insurance Crime Bureau (NICB).
CargoNet's database and information-sharing system were designed by a group of law enforcement, insurance industry and supply-chain experts, according to Scrofani. The NICB coordinates investigation support and law enforcement liaisons. ISO built the database and provides data management and analysis for the system, which went live on Jan. 31.
As a charter insurance member of CargoNet, CNA joins a group that includes Allianz, Chubb, Hiscox, The Hanover Insurance Group and Starr Marine Agency. CargoNet has met with nearly all leading cargo insurers, the majority of which already have indicated their intention to participate in the network, Scrofani reports. CargoNet also has met with most of the top 50 transportation companies and many companies in other industries and has so far received strong support, he says. More than 10,000 law enforcement officers already access ISO Claim search and will be granted access to CargoNet, Scrofani adds.
"Through the participation of the NICB, CargoNet works very closely with law enforcement," relates Pat Stoik, VP, inland marine, Chubb (Warren, N.J.; $13.2 billion in annual revenue). "They are setting up networks where they keep insured -- owners or truckers -- aware of hot spots to avoid, dangerous places where a high number of thefts occur." They also offer advice, such as which truck stops are most secure and shipping techniques that prevent theft, Stoik notes.
In the event of a theft, an independent trucker or transportation company driver might report the theft of his trailer by entering relevant information into predetermined fields within the CargoNet front end, either by phone or over the Internet, explains CargoNet's Scrofani. That information is then circulated, on a need-to-know basis, to law enforcement and other concerned parties. The speed and reach of this information sharing, he insists, increases the chances of recovery of the goods dramatically.
Each incident of theft logged by CargoNet also expands the body of theft data for analysis. Using the fruits of that analysis, insurers and their policyholders can take measures to reduce the likelihood of future theft, Scrofani suggests.
"People acknowledge Cargo theft is a huge problem, not only in the U.S. but globally. But it's not really known just how big the problem may be," says Tim Donney, global head, marine risk engineering, Allianz Global Specialty (a unit of Munich-based Allianz; $129 billion in annual revenue). "Having access to the data will help both AGCS as well as the marine insurance industry generally to get a better picture of how bad the problem is. If you want to push for enhanced law enforcement or other measures, you have to have statistics to back up any initiative."
Value-Added Service
By encouraging its insureds to participate in CargoNet, insurers will be able to offer a value-added service that improves their performance, says Chubb's Stoik. "There should be less theft, and when it does occur, [policyholders] have a much higher likelihood of recovering than before," he explains.
Those results have implications for the cargo protection business written, according to Stoik. As shipment becomes less risky, "We are able to provide more competitive premium for insureds who are not suffering losses," he says. "If we're able to offer a service such as CargoNet that allows them to ship goods and not suffer losses, it's a win for everybody concerned."
CargoNet's Scrofani is optimistic that the value seen by existing charter members will convince others to join, from within insurance and from the other industries affected by cargo theft. "Because of its self-sustaining value for a cross section of industries, we are hopeful that CargoNet will achieve mainstream acceptance in the fight against cargo theft," he says. "We are moving in the direction of critical mass, and as we continue to interface with various industry and law enforcement databases, we should see additional interest and growth."
CargoNet's Charter Insurance Members
(as of 3/31/2010)
Allianz (Munich)
Chubb (Warren, N.J.)
CNA (Chicago)
Hiscox (Hamilton, Bermuda)
Starr Marine Agency (a subsidiary of New York-based C.V. Starr)
The Hanover Insurance Group (Worcester, Mass.)
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio
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