I was in Cobh (fka Queenstown), Ireland, yesterday. Cobh was the last destination for the Titanic before its fateful collision with an iceberg sent it to Davey Jones Locker. The picture above is next to where the third-class passengers would have had to board on the tender America, which took them to the Titanic that was moored further out in the harbor.
Lloyd’s paid the Titanic claim in 30 days. Lloyd’s has a fantastic website regarding the history of the Titanic’s underwriting and the payment of the claim. Remarking on the underwriting:
Broker Willis Faber & Co came to Lloyd’s on 9 January 1912 to insure the Titanic and her sister ship, the Olympic, on behalf of the White Star Line.
Helped by the fact that the ships were universally advertised as ‘unsinkable’, the policy was subscribed to by all marine underwriters at Lloyd’s and by most London marine insurance companies.
Different underwriters took portions of the risk ranging from £200 to £75,000, and by 11 January the slip was complete; the Olympic and the Titanic were fully insured for £1m each. It was the largest marine risk ever, amounting to 20% of the total £5m capacity of the market at the time. (The total insured marine losses for all of 1912 came to £6.75m).
The Prudential made a video about its prompt payments regarding the life insurance claims caused by the Titanic’s sinking:
Why can’t American property insurance companies pay total losses this fast? The technology to do so is certainly much better now, but where is the will? Do American insurers have enough experienced and trusted claims adjusters in the field who can perform the type of claims service Lloyd’s was doing over 100 years ago?
I highlighted this claims delay issue in a post, Insurance Claim Payment Delay Following Expected Disasters is Epidemic:
The typical business interruption adjustment does not start for months. Insurers no longer have staff adjusters who have any training about determining the amount owed for a coverage they sell with virtually every commercial policy issued. Instead, the entire claim industry sends their customers’ business interruption claims to third party accounting firms who rarely go to the business loss site, but then ask for financial information months following a loss. Why don’t insurance companies have these accountants immediately go to the business, speak with the policyholders, their bookkeepers, managers and accountants on site and then issue a payment right away? Can you imagine any other industry in the emergency response business saying, ‘hey, sorry this happened to you, thanks for telling us and we will fix your problem six months from now’?
Full payment is important. Prompt payment is just as important. Cheers to all companies that fully pay the amount of a total loss in 30 days as Lloyd’s did! It should happen a lot more often.
Thought For The Day
In the ocean of baseness, the deeper we get, the easier the sinking.
—James Russell Lowell