The Maritime Standard looked for the first time at the impact of the pandemic on marine insurance during its latest Covid-19: A Leadership Webinar, held on Wednesday 10th March. The theme of the event, well attended online by over 400 international guests, focused on the theme of “Reshaping the future of marine insurance in a post pandemic world” and highlighted some of the successes of the sector in adapting to the challenges of the pandemic as well as some of the ongoing issues that need to be addressed.
The Maritime Standard assembled a really high level group of marine insurance executives with many years of experience and expertise in different marine sectors, who were able to reflect on the lessons learned from 2020 and provide useful insights as to how the year ahead might unfold for the industry, against the backdrop of the ongoing pandemic. Panellists included Dr Tarek Seif, General Secretary of the Insurance Federation of Egypt; Satyajit Tripathy, General Manager, General Insurance Corporation of India; Bimal Bhatia, Director, Nasco Group; Mark Cracknell, Managing Director, Marine and Cargo Division, Marsh JLT Speciality; Amir Mosadeghi, Chief Executive, Islamic P&I Club; Julien Horn, Portfolio Underwriter; TT Club Mutual Insurance, Middle East, Africa, Turkey and Eastern Mediterranean; and Captain Zarir Irani, Managing Director, Constellation Marine Services, past global President of the International Institute of Marine Surveying (IIMS).
These seasoned industry leaders reflected on how tough market conditions have been over the past year, and the challenges presented by the lack of face to face interaction with clients and working from home. Nonetheless, there was a broad consensus that marine insurance had shown great resilience and adaptability in the face of the pandemic and had embraced new technology and ways of working to meet the industry’s needs.
Dr Tarek Seif highlighted the significant drop in gross premiums, and higher accumulations, that had followed the onset of the pandemic. He added, “We have seen that the risk characteristics have changed as well, with owners requesting extensions to their cover. The new circumstances have in fact challenged the basic business model itself.” Mr Tripathy agreed that the market was seeing a growing accumulation of risk at ports and with regards to cargo movements. He added, “This is a big concern and is not something that is going to reduce in the near future. It will take time to subside. In the meantime, the pandemic is reducing our ability to service our clients as we would normally like to and that is something we have to focus on.”
Despite the challenges, the marine insurance sector has continued to provide highly effective support to the shipping industry. As Mark Cracknell reflected, “I have been struck by the resilience of the marine sector generally and in particular how well marine insurance has reacted to the crisis. The loss of face to face communication has been largely overcome by using new technology, for example.”
These sentiments were echoed by Julien Horn, who said, “The marine insurance world has reacted in a way that many would not have expected, showing exceptional resilience. Marine insurers and shipowners have worked together to keep cargo flowing, and have accelerated the use of digital tools, to expedite cargo release for example, almost overnight to do so.”
There have been some more negative issues which the industry is having to deal with. Captain Irani said, “There has been a big impact on crew morale, and this has affected their ability to do their jobs diligently and professionally, and as a result we are seeing more claims due to negligence and in some cases sabotage.”
Crew related issues were also highlighted by Amir Mosadeghi, CEO, Islamic P&I Club. He said, “Risks related to crew members have increased and that is one of our main concerns. It is important that the industry overcomes the current lack of ways to help crews onboard.”
There was agreement that working within the marine insurance business had changed with Bimal Bhatia highlighting the administrative challenges which had been successfully met by more home working. “This is something that is here to stay,” he said. However, some panellists suggested that not all companies would retain home working, with Mark Cracknell pointing out that the Marsh strategic approach was to get staff back into their offices at the earliest opportunity.
Clive Woodbridge, TMS editor and webinar moderator, said, “This was a fascinating insight into the changed world of one of the industry’s most important sectors. The panellists covered a huge amount of ground, from increased automation and digitalisation in insurance and the growing use of Big Data to the need for different approaches to training and education and growing cyber security threats. What was clear was that the marine insurance business has held up well, has adapted to changed circumstances and is as a result well placed to provide all-important support to clients over the coming year and beyond.”
To view the recording of the webinar please click the following link: https://bit.ly/3qPZ9SS