Peace of mind for precious cargo

VALUABLE GOODS: Falvey Cargo Underwriting handles insurance for all kinds of cargo, but specializes in advanced technology. Picture above, from left, are: Falvey Cargo Underwriting Vice President of Finance & Administration Jane Falvey, Vice President Isabelle Therrien and President J. Michael Falvey. / PBN PHOTO/RUPERT WHITELEY
VALUABLE GOODS: Falvey Cargo Underwriting handles insurance for all kinds of cargo, but specializes in advanced technology. Picture above, from left, are: Falvey Cargo Underwriting Vice President of Finance & Administration Jane Falvey, Vice President Isabelle Therrien and President J. Michael Falvey. / PBN PHOTO/RUPERT WHITELEY

Before a brand-new iPhone or Droid makes its final trip to a store or mailbox, the device and its components have already traveled the world, as did their top-secret prototypes and the custom capital equipment that made them.
With such valuable and delicate technology now logging more travel miles than ever before, the stakes involved in international shipping are higher and the consequences of failure greater than they once were.
That’s why, without a single lab technician or programmer, Falvey Cargo Underwriting in North Kingstown is playing a low-profile but essential role in bringing some of the world’s latest technology to market.
Falvey writes insurance for all kinds of cargo, but specializes in coverage for advanced technology and life sciences shipments. Those shipments have included the servers that allowed Internet companies Google and Facebook to grow and others containing new life-saving drugs.
While the recession slowed the pace of commerce and shipping across the board, the explosion in mobile computing has provided a boost for the technology sector that Falvey founder J. Michael Falvey hopes to capitalize on.
“We are obviously excited about the iPad and all the tablets and what that is doing to high-tech, because that is spinning off into a number of smaller companies and business,” Falvey said. “Everything that goes into those products, all those component parts, create a ripple effect that spawns startups. Now that people see the economy expanding, venture capitalists are getting back into it, which is very attractive to us.”
While insuring the cutting edge is at the core of Falvey Cargo’s business, the company in recent years has also been broadening its services and underwriting.
For clients interested in more than just a policy, Falvey has developed ProTecht Risk Solutions, which functions as a pre-emptive loss-avoidance service and consultancy.
The threats to valuable cargo range from a shipping container being dropped on a wharf, to temperature damage, improper packaging, theft and terrorist attack.
Falvey’s ProTecht experts track and study how clients’ cargo is shipped to identify potential weaknesses and recommend methods to minimize risk. Should something still go wrong, the service includes help pursuing “aggressive recovery techniques designed to eliminate, mitigate and recoup losses.” The company is also broadening the types of policies it writes beyond cargo.
In 2010, Falvey Cargo began selling insurance for yachts and is planning to expand the range of vessels it covers from those with values between $100,000 and $3 million to those valued between $40,000 and $5 million.
While the recession was brutal on the yachting industry, Falvey said the company’s existing computer platforms and experience give it the capacity to jump seamlessly into noncargo underwriting.
After specializing in high-tech and life sciences shipping while working for other insurers, Falvey founded his company in 1995 with the plan to specialize in that advanced cargo niche.
“People don’t realize how much is stolen, dropped or damaged,” Falvey said about high-tech cargo. “With capital equipment, it’s often dropped. Then there are pharmaceuticals that have to be shipped at [a certain temperature] or it is ruined. We are always looking at educating the insured as to how they can avoid things like that.”
The company is a fully secured underwriter for Lloyds of London with insuring authority up to $40 million and the ability to settle claims independently up to $350,000.
Since the recession, the insurance market has been soft and a number of catastrophic events have hurt profitability across the industry.
This was especially true in Asia, where a decade ago Falvey and other insurers raced to grab a piece of the expanding market, but found the margins slim. After the recession Falvey closed its Hong Kong office.
Falvey said as the economy improves, he sees insurance companies allowing premiums to rise along with demand, something that will benefit his business, which relies entirely on underwriting profits.
A graduate of the Massachusetts Maritime Academy in Bourne, Mass., Falvey comes at the underwriting business from a marine background and sees demand for ocean-going shipping increasing.
“It used to be that everyone used to ship everything by plane, now a lot of things are going ocean vessel with just-in-time shipping,” Falvey said. •?COMPANY PROFILE
Falvey Cargo Underwriting
OWNER: J. Michael Falvey
TYPE OF BUSINESS: Cargo insurance underwriters
LOCATION: 66 Whitecap Drive, North Kingstown
EMPLOYEES: 40
YEAR ESTABLISHED: 1995
ANNUAL SALES: NA

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