Mr. KS Vishwanath

Congratulations for the 2nd edition of your book ‘Insuring Cargoes’. This is a milestone for the Indian insurance industry as it showcases that our professionals can make an impact globally. Can you please tell us why you decided to write a book on marine insurance in the first place?

Thank you! There are many scholarly works on the subject. I felt there was still a little space in the bookshelf for another book, written by a practitioner, that focuses more on practice rather than theory and provides solutions to the kind of issues a practitioner confronts at his or her workplace.

 To develop a cutting-edge expertise in any subject one needs to know both the law as well as the practice. Lord Mance said in a speech:

 “In reality,  insurance and the law are inextricably linked at all points. Insurance is not like making cars or widgets. It depends on agreements and wordings for its force and effect, and agreements and wordings depend on the law for their force and effect”.

 So book covers both the legal and practical side of marine.  We need to bear  in mind that ‘we are in business to do business’- so knowledge should be used to find solutions and to ensure fair outcomes. I wrote the book with this objective in mind.

Was it the first book to be published in the UK (which is undoubtedly the most reputed among marine markets) by an Asian?

 First Indian yes. Books on marine insurance have been dominated by British authors-not surprising since the UK market continues to be one of the most respected marine markets in the world. Most wordings including Institute Clauses come from that market! We have a lot to learn from the London and other international markets.

Tell us more about the 2nd edition.

Since the publication of the 1st edition, there have been many developments. The Insurance Act 2015 of UK (which incidentally does not amend but refines the MIA 1906), new editions of Institute and Trade Clauses, developing case laws such as the Cendor MOPU which may have significant bearing on how policy terms will be interpreted in future by courts, Incoterms 2020 etc. There are 6 new chapters – these are on Delay and Inherent Vice, Contract Certainty, Non-Institute or Broker Clauses, Rejection Risks, War & SRCC and Recoveries. In the chapter on Contract Certainty, I have given examples of how unexpected and unreasonable outcomes can result from some popular exclusion wordings!  The chapter on non-Institute (broker) clauses contains an in-depth analysis of all important clauses.

I feel  that insurers and brokers who want to provide best in class coverage to their customers that ensures a fair outcome in case of a claim would find the 2nd edition useful.

How well has the 2nd edition been received in international markets?

It is too early to talk of about the success of the 2nd edition. I am however optimistic based on the success of the 1st edition. For instance, CII London included the 1st edition in their list of recommended works for one of their courses. As regards the 2nd edition, I have very flattering feedback from global experts like John Dunt and Mike Roderick.

How about the Indian market? What are your expectations?

As far as India is concerned, the first edition was quite popular, but many did not actually purchase it-preferring a photocopy instead as the book has a high price tag.  Given the time, expense and effort involved in writing a book of this size and complexity, I hope that no one will resort to photocopying the 2nd edition. Surely, it is not unreasonable to expect greater support in my own country!

I do know both the GI Council and IBAI are taking efforts for the success of the book. I am immensely grateful to them.

It is believed that you set your eyes on the subject right from the time you joined National Insurance in 1981. Your experience can be a great source of inspiration to professionals who are now entering the Indian insurance industry! Any word of advice for young professionals?

I was lucky that in my formative years I worked in a large government Insurance Company (National) with a broad-brush underwriting appetite and was given an opportunity to do both Hull and Cargo-underwriting as well as claims at the head office level. Unlike private insurers there was no separation of underwriting and claims functions and one had to both. Handling a variety of claims was a huge exposure. Later overseas exposure also helped. 

As a practitioner who has worked both in India and the overseas markets, what are your thoughts on the Indian Marine market?

Ever since cargo became a bundled product and an entry strategy for the erstwhile tariffed products, companies have adopted a portfolio approach as opposed to underwriting each risk on its merit.

Insurance should be used for protection of the balance sheet of a company and not used as a money swapping instrument. Our large corporates often forget this and go for the cheapest premium instead of ensuring a best-in-class coverage backed by risk management. As a consultant I have always told my clients that insurance should be driven from the top so that the right message gets embedded within the organisation.

What are the steps in your view that can be taken to improve the quality of Marine insurance professionals engaged with the business?

A practitioner in New Zealand once told me that his staff is the best trained marine underwriters in the market and naturally become targets for their competitors. However, he would rather lose trained staff to the market than having to compete with untrained competitors for obvious reasons. What a great way of looking at things!

 I feel there should be intensive advanced training programmes for a few selected professionals in the country who would like to specialize. There is no point in spreading meagre resources too thinly across the industry for a mixed group.  Training programmes should involve brainstorming over underwriting and claims case studies so that participants can apply the learnings in their workplace.

Similarly, there is an urgent need for training our surveyors too to upgrade their skills to international standards. To put in place a robust training platform for them would be expensive!

Do you think the younger generation of insurance professionals is taking to Marine?

Though marine insurance is a small percentage of the total Gross Written Premium, it still manages to attract bright young professionals.  There must be a strong desire however not to be content with just being competent but to develop a cutting-edge expertise. Pursuit of knowledge should be relentless! On the claims side, there is  need to substantially improve our  skills instead of relying on cargo surveyors to determine liability which is a dangerous trend in India as far as marine is concerned.

Eventually, as our market becomes more sophisticated, the need for specialists to handle complex risks will be felt. Developing marine as an independent profit centre is the need of the hour, otherwise specialists will not emerge.