The marine insurance sector is undergoing a period of change. We need to ensure we fully understand the risks our industry is facing and offer products that match these new trends and deliver adequate cover needed.
There are four (4) new risks the insurance industry is facing that underwriters must endeavour to better understand:
(1) The grow of cyber threats, cause by the growing reliance on IT within shipping companies, ports & logistics and offshore. Marine underwriters need a better understanding of these risks and must tailor their products to meet client needs. We are experiencing a number of external challenges due to increasingly complex technologies including inherent network complexity and the impact from the financial environment.
(2) The growth in usage or deployment of Ultra Large Container Vessels, a trend that is affecting insurers due to the huge cargo values transported aboard; integrity of vessel structure and stability; and the ability of global salvors to respond to an incident. All this increases exposure for insurers. In addition, recent incidents involving car carriers raises a question about accumulation issues in automotive policies. This never-ending search for economies of scale within the shipbuilding and operating sector has raise the bar….
(3) The increasing complexity of offshore installations including larger Floating Liquefied Natural Gas (FLNG) and Floating Production Storage and Offloading units (FPSO) operating in remote locations, including Arctic waters. The more complicated mooring systems and increased on-water traffic surrounding these installations is also causing concern, as is the current volatility in oil price. The uncertainty over oil prices and the general economic picture is also exposing marine underwriters to a level of risk not experienced before.
(4) The rise of mega subsea construction projects in remote offshore areas pose huge challenges to insurers in determining risks, including the value of equipment and the likelihood of salvage.