Risky business

Mar 10 | 2020

According to Eduard Pfeifer and his son, Andreas, from HVD Insurance Brokers in Hamburg, it’s all to do with relationships. Steve Jordan caught up with them for a chat to find out a bit more about the company and insurance in general.

Andreas and Eddie Pfeifer

It was back in 1984 that Eduard (Eddie) Pfeifer started his own insurance brokerage.  It was a natural step for him having spent much of his working life previously in the forwarding industry. “In the beginning it was just me and an assistant,” he explained. 

Understandably Eddie concentrated in providing insurance for the forwarding industry and moved into the moving sector when approached by Browns, a moving company in Bremerhaven, and the business evolved from there.

Today household goods insurance represents around 25% of the company’s business with the remainder still in forwarding for blue and brown water consignments (ocean and river), road transport, seaports and railway companies.  As well as insurance for businesses, Eddie also provides personal insurance for some of his customers.

The company has ten employees, including Andreas who joined in 2017 also from a forwarding background.  He also studied law which he says is useful in helping him understand and advise clients on the legal side of the business.

Andreas said that there are a number of recurring issues that are important for clients to understand. One key area is that of General Average.  Although it’s not common, it’s very important for moving companies to explain General Average to their clients, especially if they are tempted to ship without taking out insurance. General Average is declared should a vessel require salvage.  In this case, the cost of recovering the vessel and its cargo is borne by the owners of the goods on board.  If goods are insured, the owners are protected.  If they are not, the owners could face unexpected charges even though their goods were not lost or damaged. “It’s more common than people think,” said Andreas.  “Many moving companies and most customers don’t understand the principles of General Average.  Even if people are not interested in recovering the value of their goods, they should take out insurance anyway to protect them against this very real risk.”

Claims negotiation is a key role of the insurance broker.  Even if the moving company handles its own claims, it will do so with the support of its broker.  “It’s often very important to work together with the mover to understand the cause of damage, maybe even interviewing the crew that was on the scene,” said Andreas.  “There is always a balance to be struck.  The moving company needs to settle claims quickly, but if they are paid unchallenged, it can have a detrimental effect on its claims record and, therefore, the rates paid.”

There is also the perennial problem of under-declared values and Andreas said that it is important for movers to explain the problems of under insurance to their clients. He added that, in Germany, it is a legal requirement for a company to obtain written evidence that the customer has been fully informed about insurance options.  “If the mover does not do that, it will have no liability restrictions.” His recommendation is that the sum insured should represent the true value of the entire shipment and that customers are informed in writing of the conditions that apply.

As insurance brokers go, HVD is a specialist company, but Andreas and Eddie feel that this gives them an advantage.  “We have direct contact with our customers, without them having to go through account managers,” said Eddie.  “We have known many of our customers and all our insurance companies for a very long time.  This helps us to take a long view so if a mover has a bad year, we don’t overreact; we know that, over time, their record is likely to even out. These long-term relationships create trust both ways to give us more freedom to act quickly when necessary and help us to get the best deals for our clients.”

Photo:  Andreas and Eddie Pfeifer.

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