Munich Re seeks marine edge
The depressed situation in the marine insurance segment is unlikely to change any time soon, but Munich Re believes that investing in technology will allow it to better select and price risk, and is hoping for a first-mover advantage and to provide new products, John Wilkinson, chief executive of global marine partnership Munich Re, told Monte Carlo Today.
The cargo market is extremely competitive and the hull insurance sector has not made a profit in 18 years, Wilkinson said.
“There is too much capital in the insurance market and it has spread into specialty lines like marine, particularly into offshore energy,” he noted. Munich Re does not see this changing any time soon.
“We have to live with the situation as it is. The opportunities come from new covers, and from the ability to use available data to take advantage of the requirements of a changing industry,” he added.
Munich Re believes that by accessing data and leveraging the potential of internet of things (IoT) technology, it will be able to select and price risks in the marine sector more precisely.
The firm has acquired IoT software company relayr via its subsidiary, Hartford Steam Boiler, aiming to create new business models in the industrial IoT.
The firm has developed a platform that can be used by companies to connect new and legacy hardware and software to extract and analyse data from physical objects such as machines and equipment. This makes it possible to determine when a machine is likely to fail, for example, and conduct maintenance to ensure that this does not happen.
“There will be a lot more data available, and a lot more transparency, which will improve risk management and make sure that actual losses don’t happen,” Wilkinson explained.
“Companies will pay the right price for the cargo they are transporting, and not based on our assumptions on what they are transporting,” he said.
“If we have more data about what is being transported, on the record of ports, on road transportation, we will be able to provide a very different level of risk support for the companies doing the shipping,” Wilkinson said.
“It is up to us to come up with interconnected policies that consider the IoT world. It’s sort of a first-mover effect which offers the opportunities.
“Because there will be much more information it will be easier for us to extend the boundaries of insurability,” he concluded.
