Marine market must embrace evolution, urges Beale

The marine insurance industry is taking major steps towards digitisation, and it is important that the market embraces innovation as an integral part of its evolution. Those were some of the thoughts of Lloyd’s chief executive Inga Beale, who last week shocked the re/insurance industry by announcing her intention to retire later this year. “We want innovation to truly flourish, and I want to be able to talk about Lloyd’s as being the most innovative, and in some areas we are,” Beale said during the Marine Insurance London conference. “We have to think about our products,” Beale urged, adding: “Are we really innovating enough? Are we really giving our clients what they need today? “How can we use the data that is available - the data analytics? What can we do to make sure we stay ahead of the game as we have done at Lloyd’s for so many years - always being the one that’s being the most innovative? I would like the underwriters and the brokers to work really hard together on this - to think about is our product evolving fast enough? Are we being innovative enough?” “I just want to make sure we’ve got enough momentum and everyone working together. If there’s one thing we do well in this market that is collaborating together in the innovation space.” However, Beale also stressed the importance of face to face interaction – a crucial component of the vibrant Lloyd’s market. As Beale explained, the challenge is to move the market forward and encourage digital technologies, while at the same time retaining the unique face-to-face nature of Lloyd’s. “The face-to-face is so important [and] the relationships that people have. That’s not what we are trying to disrupt here.” Beale accepts that with innovation, inevitably some challenges will arise. “We’ve got new technologies - there’s a big discussion about autonomous shipping and what risks autonomous shipping brings in terms of cyber-attacks.” And Beale said insurers need to be mindful of what the associated exposures to such technological advancements are, and whether underwriters should be taking them on. “We’ve also got all sorts of things happening in terms of the companies operating in that sector, consolidating [and] wanting to take advantage of economies of scale if they can,” Beale added. Cost Cost is also an issue for insureds looking to procure some of the innovative coverages on offer form the industry, Beale said. “Pressure on cost is rife everywhere, and insurance is often seen as that cost. People are not understanding the full mitigants that we actually provide enabling their businesses to become more resilient.” The regulatory landscape is also proving a challenge, adding further costs. “We’ve had new regulations and adverse court rulings, the incident in the Spanish court in 2016 that held the London P&I club and the captain of prestige tanker liable for the economic cost of the oil spill, [for example]. “And this is just one change. We’ve also got bigger ships carrying higher volumes of cargo, expanding ports - all of that we should see with great opportunity. But what are we seeing on our profitability in our insurance market? These uncertainties have all compounded by the changing risk landscape. We’ve got aggregation of risk that we’ve never seen before.” Another concern for shipping firms is the risk posed by cyber events such as hacking. As Charles Fernandez, the head of marine liability and hull at Canopius, explained... CLICK HEADLINE TO READ MORE

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