A new sense of possible: COVID-19 will force marine insurers to embrace technology
It is time to embrace the changes that COVID-19 has compelled the industry to make, says a panel of industry authorities who believe that a number of changes and opportunities are to be expected in the long term. Demand for digital technology is on the rise and changing the way that insurers conduct business.
These views came to light during a panel discussion held on Intelligent Insurer’s Re/insurance Lounge, an online platform where interviews and panel discussions are held live on a weekly basis with content available on demand. The session also covered wider trends in marine insurance.
“There have been a number of changes including how data is being used from a risk management perspective but also finding a right price and premium,” said Richard Turner, president of the International Union of Marine Insurance.
“The mechanism that has existed in the marine market to select and price risk has been sub-optimal, because the market has consistently underperformed”.
He added that risk needs to be more effectively. “Data and technology can better assess risk and there is a stack of opportunities still to come.”
Graham Jenks, senior vice president, cargo practice leader at Southern Marine & Aviation, said that data is having a positive effect on the market and that in the past (without data) there was underwriting of risks that were not fully understood.
“We are starting to see the arrival of innovation in the autonomous ship space,” added Turner. “Environmental considerations will cause a huge amount of change that will drive marine insurance.”
A long way to go
However, Andrew Yeoman, chief executive officer of Concirrus, believes that autonomous vessels are still closer to demonstrating that technology could be working and having a wider impact than we think.
“There are aspects of how technology can improve things such as crew safety and a lot of technology is going into the marine industry itself,” he said.
“However, in the marine insurance industry we see that technology is supplied in two ways: efficacy of capital and efficiency of operations.”
Yeoman added that insurers need to ask if this the right risk to write at this price and if it fits into their portfolio.
“Technology can help the industry, but we have a way to run,” he says.
Seema Pandey, marine director at Mar Risk Services, pointed to a lack of cohesion in the industry. She added that there has been a very slow uptake in cyber risk, which is surprising given the industry push during this time.
“It could be due to cost or a lack of understanding. Unfortunately a big impact moment may be the only thing that alters the slow market in cyber risk,” she said.
Jenks added that perhaps it will take a massive event to shift the market.
While technology has certainly started to make waves in marine insurance, the cybersecurity threat is still a concern for marine insurers. Underwriters well are aware of the threat.
“In fact, cyber risk is already taking place and clients urgently need to think about this,” concluded Turner.
To watch the whole hour-long session click here.
