The performance of each factor is shown relative to a global vessel averagefor context.Underwriters and Brokerstherefore havea clear understanding of how to approach an account. Negotiation, consultation, warranties, and renewalsreceive furtherevidence, supporting a targeted approach to risk mitigation.If looking at Influential factors at an account level,individual vessel profilesare listed clearly in terms of contribution to that factor for a targeted approachto improvement.
Figure 1 Average Port Risk
In practice, warranties can coverunderperforming factors to enable business to be written at renewal. A target for that factor can be negotiated, whereby morefavourableterms would come into place if achieved during the life of the policy. This would lead a Broker to focus client consultation efforts on achieving agreed KPI’s, making future placement of the account more attractive.Incentivisinginvestment into initiatives that actively lower risk profile turns the placement of risk into a more long-term proposition. The real-time position of an account becomes more important than a single snapshot of risk at renewal date. Therefore, a more customer-centric market should emerge.
Successful accounts will see reduced exposure through better access to data and direction. Brokers will see improved retention due to the added value delivered to the Insured. Underwriters will be able to continually monitor efforts due to the real-time nature of data received. With more transparency and improved directives, the sector will see risk profiles and loss ratios improve.Thisisespeciallyimportantin a hardening market, whereplacement becomes even more selective.
Figure 2 Policy life-cycle
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