The challenges for insurers underwriting vessels and cargo bound for the unpredictable high seas have always been significant.
Moreover, with new mega-ships capable of carrying 20,000 containers, and cargoes valued at more than US$2 billion, plus the arrival of autonomous ships in the near future, the stakes for insurers could not be higher.
Last year was particularly difficult, with three devastating hurricanes in the Caribbean and Gulf of Mexico putting further pressure on a marine insurance sector that is already suffering from low margins, tough competition and squeezed prices. In fact, responding to last year’s US$1 billion dollars of insured costs, Lloyd’s has produced a Risk Insight report, based on the possible ramifications of climate change.
Of course, given that marine insurance covers various aspects of the movement and storage of shipped goods, the vagaries of the weather at sea and the safe loading and passage of ships can be seen as one element of a complex supply chain.
When SSL came into the London Market in 2003, it brought fresh ideas from a talented team of marine insurance specialists, focused on growth and modernisation. For this reason, the company quickly built an impressive book of fleets and attracted clients in more than 80 countries.
The recent merging of Endeavour Insurance Services and SSL Insurance Group, to form SSL Endeavour, will allow the marine insurance team even greater scope to push ahead with its forward-thinking philosophy.
It’s a philosophy that leans heavily on a dynamic attitude to new technology, and is now fully focused on the disruption taking place in the sector.
Today, for instance, the growth of cyber threats to shipping cannot be overlooked, with vessels targeted, as well as cargo whether at sea or while in storage on land.
Pirates can accurately track ships, and their growing sophistication could see them completely undermine ships’ systems, and even amending the ownership details of cargo.
Responding to new risks
Clearly, to respond to these evolving and very real threats to maritime ventures, all stakeholders within the marine insurance value chain must have a deep understanding of the technologies being brought to bear on this sector.
One such technology helping to safeguard cargoes and reduce both operational complexity and costs is Blockchain.
A technology on the drawing board only a year ago, Insurwave is now the world’s first Blockchain-enabled platform for marine insurance – in use today by one of the world’s largest container shipping companies, AP Moller-Maersk.
As it rolls out, the developers claim Insurwave can support more than half a million automated ledger transactions and help manage risk for more than 1,000 commercial vessels a year.
These are just a handful of examples that illustrate the evolving nature of risk and processes in the marine insurance market – and it’s clear that a modern, adaptable approach is critical.
Commitment to technology
This echoes Lloyd’s commitment to technology, with the electronic placing platform, PPL, at the heart of its Targeting Operating Model. Marine insurance has been written on the platform since its launch in October last year, demonstrating the commitment of the London Market to one of the industry’s most exhilarating sectors.
Brokers like Endeavour and SSL, which will soon be combined as SSL Endeavour, must demonstrate the value they bring is still critical to the insurance process.
Endeavour’s new Advantage claims handling platform is a clear example of the value we bring – free technology for our clients that streamlines processes and increases efficiency, resulting in clear and immediate benefits for coverholders, underwriters and the insured.
We are looking forward to embracing the ever-changing marine sector, working with our talented SSL colleagues to bring further efficiencies and economies of scale to our clients. Watch this space!