The President of the International Union of Marine Insurance (IUMI) has told its annual conference that the marine insurance sector has to modernise if it is to prosper.
Speaking in Toronto, Richard Turner, opened the world’s largest gathering of marine underwriters by warning things had to change.
“We must maintain pace with a changing world,” he said. “Some of our clauses were written decades ago and well before the modern digital age. We need to re-think the coverage we offer and how we react to claims situations. We also need to utilise all the digital tools within our grasp to enhance the way we assess and price risk. Technology will drive a recalibration of the skill-sets required for more effective underwriting.”
He said currently the market faced a “painful period”.
“For many years, supply has outstripped demand and a sustained period of unprofitability has resulted in a reduction of capacity,” said Mr Turner. “Coupled with this is the worrying trend of ‘commoditising’ our products and transferring individual policies into bundled facilities. A sad corollary is the loss of expertise jettisoned in the short-term pursuit of reducing costs.”
Turner went on to say: “At a macro level, we are concerned by increasing protectionism and political instability. We are also seeing structural changes to the maritime and transportation sector, particularly in relation to the continued rapid growth in Asia – both in terms of a demand for raw materials and an upsurge in manufacturing. And, of course, ships and ports continue to grow in size and accumulate higher levels of values and associated risk.”
He concluded: “Throughout the centuries, marine insurance has always found a way to adapt, regardless of the challenges and chaos it might have faced at the time. Cycles have come and gone, but as an industry, we’ve consistently found ways to reinvent ourselves. Through invention and innovation, I am confident we will find a sustainable way through the current challenges. Marine insurance underpins global trade and will remain a valuable enabler of business wherever it is conducted.”