The International Union of Marine Insurance’s (IUMI’s) outgoing president has said insurers have to “think outside of the box” if they are to remain relevant to the global shipping industry.
As IUMI met in Cape Town, South Africa, for its annual conference, Dieter Berg warned that technology has the ability to change the face of shipping, and insurers must evolve with it.
“Last year I said that I believed that the shipping and logistics industries were behind some their peers when it came to the use and implementation of technology,” he said. “However, in the past year, I have travelled the world, including Silicon Valley in the USA, and that has changed.
“We are seeing in the US, Asia, and Europe technology companies that are changing the way we deal with our industry. They are changing how logistics and the supply chain operate.
“Smart ports are being created in Asia and Europe to ease vessel congestion and speed the flow of cargos.
“Our clients’ business will radically change [and] so will their risks. In the years to come, we will see some of today’s risks eradicated by technology that will deliver enhanced safety systems. Some of today’s risks will diminish, but we will also see new risks emerge.”
It is up to the marine insurance sector to react to those changes, he added, urging firms to start considering what the new risk environment will look like and preparing to aid clients to meet those risks.
“It will create a change for insurers and we have to begin to think outside of the box and create new products that will meet these emerging risks,” Berg said.
Berg warned that the market faced significant challenges outside of the sphere of digitalisation, with the effects of climate change still yet to be fully evaluated.
“When it comes to climate change in the marine insurance market, we are not impacted by earthquakes or windstorms to any great extent,” he explained. “It is flood and storm surge that can impact our clients, and recent years have seen some significant flood and surge events.
“We need to look at the losses of recent years as a new norm and plan for such.”
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