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Wednesday, October 3, 2012

Maple syrup heist - profile for Burglary Insurance

A good Underwriter would profile the subject matter insured, collate more details, analyse and take decision to Underwrite – whether to offer coverage or not, and if yes, at what terms and conditions and of course at what rate !. 

Burglary insurance provides indemnity for loss or damage to property insured from the premises insured directly resultant from acts of burglary.  Small articles of high value are generally perceived to be bad risks, so too are products which have a good retail market.  While a pack of cigar can be easily sold within minutes of it getting stolen, it would be bulkier and voluminous to have a large scale burglary.  There could be some items of high value, but which cannot be sold easily in grey market, may not attract the burglars.  Also heavy weighing items and those stored in bulk are also not prone to higher frequency of burglary. However, it is not how much it is valuable to the thieves / burglars – a property once stolen is loss to the owner, irrespective of whether it is of use or not to those who burgled.   So would you insure ‘maple syrup’ if proposed for insurance against burglary risks ?

Sure you would identify this too easily – a maple leaf – the one on the Canadian flag.  The maple is a common symbol of strength and endurance and has been chosen as the national tree of many countries including Canada. Maples are variously classified in a family of their own, the Aceraceae, or together with the Hippocastanaceae included in the family Sapindaceae.  There are many species native to Asia too. 

Maple syrup is a syrup usually made from the xylem sap of sugar maple, red maple, or black maple trees.  In cold climates, these trees store starch in their trunks and roots before the winter; the starch is then converted to sugar that rises in the sap in the spring. Maple trees can be tapped by boring holes into their trunks and collecting the exuded sap. The sap is processed by heating to evaporate much of the water, leaving the concentrated syrup.

The Canadian province of Quebec is by far the largest producer, responsible for about three-quarters of the world's output; Canadian exports of maple syrup exceed C$145 million (approximately US$141 million) per year.  Sucrose is the most prevalent sugar in maple syrup. In Canada, syrups must be at least 66 percent sugar and be made exclusively from maple sap to qualify as maple syrup. Maple syrup is often eaten with pancakes, waffles, French toast, or oatmeal and porridge. It is also used as an ingredient in baking, and as a sweetener or flavouring agent.

Heard of someone with ‘sticky fingers’ – it implies the tendency to steal things. This month [Sept 2012] Police in Quebec are hunting for some sticky fingered thieves who pulled off the sweetest heist of all – stealing $30-million worth of maple syrup from a warehouse with such precision, the industry group has no idea whodunit, or even when it happened. A team of officers are investigating the crime scene at a warehouse in St. Louis de Blandford, Que., which housed a portion of the Federation of Quebec Maple Syrup Producers’ reserve. This is no small stash – Quebec produces 70% to 80% of the world’s maple syrup, and at least 10 million pounds are missing.

The warehouse, in St-Louis-de-Blandford, 160 kilometres northeast of Montreal, held about 3.4 million litres of bulk maple syrup and is part of a global strategic reserve of the sticky liquid.  The federation of producers said the Sûreté du Québec and an auditing firm are determining exactly how much the thieves took.  The warehouse reportedly had been secured by a fence and locks and the syrup was being held at the warehouse temporarily while the finishing touches are put on a new storage facility in nearby Laurierville, Que. It was supposed to be transferred over the coming weeks. The theft was discovered during a routine inventory check of the warehouse, which "had been secured by a fence and locks, and visited regularly," federation president Serge Beaulieu said in the statement.  The barrels that originally contained the syrup were empty, meaning it was somehow transferred to some other kind of containers to complete the theft, the federation said.

The puzzle is how the culprits managed to siphon off almost C$30 million ($30.4 million) of syrup. That’s the equivalent of 10 million pounds or roughly 15,000 barrels of syrup. And the stock didn’t vanish somewhere in the supply chain of a major city. It’s missing from a warehouse in Saint-Louis-de-Blandford, a tiny town of 903 people, according to the 2011 Census. They’re usually more focused on cranberries, whether it’s harvesting them or celebrating them in cranberry festivals.

The stock of syrup was insured, the federation said, so its members will not lose financially. The Federation of Quebec Maple Syrup Producers administers a bulk sale system with quotas on individual operations.  The trouble is this being an edible item with ready market, there is no means of identifying the stolen stuff.  One report suggests that in Canada alone, thieves have recently made off with a “football field’s worth” of potatoes, hives containing 3,600 kilograms of honey, 6,000 cattle, and 72,000 kilograms of chicken. Anyone who loves maple syrup knows the real stuff needs more than just a lock and key.

With regards – S. Sampathkumar.
25th Sept. 2012

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