Press Release: Marsh, the world’s leading insurance broker and risk adviser, is warning retail jewellers to review their risk management and security practices ahead of the 2010 insurance renewal season or risk facing sizeable increases in their premiums next year.
Marsh’s advice follows a spate of well-documented losses in the diamond and jewellery market this year, ranging from ‘stone-switching’ and fraudulent valuations to high-value jewelry robberies. In addition, the market has also experienced a downturn in the wholesale value of certain classes of diamonds and precious stones, in conjunction with a drop in consumer demand.
Jonathan Ballard, a Vice President in the Specie Practice of Marsh, explained: “Sophisticated crime syndicates are taking advantage of the current security procedures in the high-end jewelry retail sector, which are often weighted more towards creating a more positive customer experience than the overall protection of the products. For example, many high-end jewellery stores have their inventories freely available on the internet, or potential customers are able to just walk in off the street.
“As a result of the number of high-profile losses this year, and a general view that the moral hazard risk is increasing, insurers will be examining their risk portfolios and claims trends more closely in 2010. Companies that are perceived to be failing in managing their risks effectively, or have suffered a loss, are more likely to have a tougher time at renewal.
“However, by working with their insurance broker and demonstrating that they have taken practical measures to improve their risk management and security, companies may still have a more favourable renewal experience.”
Among the simple measures Marsh recommends high-end retailers can take to enhance their security are:
· Using a ‘double-door’ system to impede access to and from the premises
· Having fewer high-value pieces on regular display
· Implementing an appointment-only system
Marsh also recommends that jewellery retailers, regardless of size, undertake regular security surveys to pinpoint weaknesses in their current security measures and identify areas where it needs to be enhanced.
Mr Ballard added: “Security surveys should be carried out on a regular basis. Crime syndicates have proven to be more sophisticated in recent times and as such the recommendations of the security survey may be altered to reflect changes in the underworld’s modus operandi.
“Good communication among the insured, insurer and broker is essential in these testing times to ensure that firms stay ahead of the criminals’ game, maintain stability and gain peace of mind.”
Source: www.israelidiamond.co.il
