Three marine classes – cargo, hull and yacht – were reviewed by Lloyd’s last year, according to Insurance Marine News. One of the main findings?
“…the question of whether they can return to profitability in 2019 was ‘up to the underwriters’, said (the) performance managing director at Lloyd’s Jon Hancock yesterday, at a conference to announce Lloyd’s 2018 results.”
It’s no surprise to marine insurers that improving underwriting discipline is crucial. But how can they improve it, while also reducing expenses? The first step is to analyse the evolving landscape.
The data landscape supporting the marine market’s underwriting (as well as actuarial and claims) processes has drastically changed, with never-ending streams of data flowing from a variety of sources. To reduce risk, and offer benefits to customers and brokers, insurers must effectively manage these streams – including images and other raw data from hundreds of sources, such as geo-tagging of global ports. This challenge affects marine players across markets, including blue water and small craft owners, charterers, traders and cargo owners, mobile offshore units (MOU) and energy facility operators, with their related, complex liabilities.
But existing generic legacy systems from the pre-digital era create tremendous integration challenges, with many marine providers being unable to use emerging digital data in an integrated fashion with the back office, agents and customers across the value chain. Marine insurers have historically had to use multiple, non-integrated ‘one-size-fits-all’ systems and sources in a difficult-to-manage environment, which negatively impacts the underwriting process and employee morale, and prevents digitalisation and appropriate automation of the customer experience.
This is a missed opportunity, because there is no shortage of parties willing to share their voluminous data sets with innovative insurers. Data from large marine passenger and trading craft and their cargo sailing across the globe, drilling units and MOUs, as well as leisure craft, is collected and analyzed, and ready to be used. Cutting-edge insurance products for hull and machinery, cargo, energy and liability, aquaculture and P&I coverages now also exist.
Agents, brokers and primary reinsurers require a powerful digital ecosystem to effectively carry out their crucial tasks, but competitive efficiency levels through appropriate automation are impossible to achieve without an innovative, cloud-based, API-ready, digital insurance platform.
The bottom line – long-term leaders in the marine market can’t improve underwriting, pricing and customer service, whilst at the same time substantially reduce expenses, if they don’t provide the right type of digital experience with true integration to the rapidly emerging digital marine ecosystem.
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