Real-Time Data and Connected Policies

Connected policies can differentiate the capabilities of Brokers, Actuaries and Underwriters. This article explores how real-time data can lead to dynamic policies based on automated workflows.

The influence of real-time data interpretation cannot be understated. Applied correctly, it can differentiate the capabilities of Brokers, Actuaries and Underwriters. Examples include risk modelling, where real-time data can advise on the overall expected loss of an account, as well as the factors influencing risk scores. The benefits of real-time data go beyond risk modelling, however. Data can be used to actively manage risk around every account through an ongoing understanding of asset behaviour. An ongoing view changes the entire approach to policy structure, powering the creation of new products that better serve the market. Such products include ‘connected policies,’ which follow a flexible structure based on supporting technology. Connected policies compliment the timely view of risk that dynamic data aggregation and analysis platforms provide.

The information used in policy creation for marine accounts can be derived from various sources. The more accurate the data, the more appropriate the policy. At Concirrus, we aggregate vast proprietary and third-party datasets to monitor vessels globally. This data underpins our Active Risk Management capability within Quest Marine, providing a simple solution to assess vessel activity. Active Risk Management is important because it allows users to track the location and path of specific vessels. They can also monitor accumulation within self-determined zones, identify specific port activity and set custom alerts.

Alerts and location monitoring form the backbone of connected policies. Alerts are automated based on pre-defined criteria interpreted by monitoring tools. Any Stakeholder can receive an alert, so a response can begin as soon as a breach in policy criteria occurs. Reacting quickly reduces net loss by ensuring adequate changes are made to the policy or behaviour during unforeseen activity.

Sanctions, war and piracy zones are all strong examples of when alerts are used. New areas of risk can be defined ad hoc within Quest Marine as soon as they emerge. This ensures activity and accumulation can be assessed within self-specified areas of interest. Insurers and P&I Clubs such as North P&I are investigating this approach to improve their members’ loss prevention.

“The depth and speed of analysis our partnership with Concirrus provides gives clear efficiencies for North’s loss prevention department. It frees up time that we can better use to support our Members. Although efficiency is the key driver at North, we are finding that as we use Quest, potential use cases become apparent that we may not have previously considered. As a result, there are numerous development opportunities to explore that should help us provide services that support our goal to enable our members to trade with confidence.” Colin Gillespie, Director – Loss Prevention at North P&I

If a vessel moves into an area of interest, it’s activity will cause an automated response to update its policy. Automation improves the delivery time of necessary changes, reducing inadequate cover and therefore exposure. Updates can include new terms which are pre-agreed, applying amendments and conditions on demand when necessary. The importance of data accuracy and interpretation is imperative for this process to be viable. Therefore, data aggregators must ensure they choose the right partners, whilst allowing Clients to take a flexible approach depending on their needs.

Inaccuracies can occur during the life of a policy due to the capabilities of legacy systems. One example is the interference of AIS signals when there’s high vessel traffic. There is currently a massive proliferation in low-earth orbit satellites with specialist providers, such as Spire Global. Simply put, what was previously unknown or unknowable now is known - the age of ‘dark vessels’ will soon be in the dark ages.

The improved visibility of insured assets, alongside integrated policies, means that Insurers can create new products. These products can better cater for market needs whilst allowing an Insurer to venture into new types of risk. New opportunities come with the added benefit of being priced more accurately.

An improved technology stack leads to better data-led products and services. These enhance the capabilities of Brokers, Actuaries and Insurers by removing inaccurate and manual processes. Automated workflows allow for more time to manage Client relationships. This method of managing such relationships will drive competitive advantage going forward.

For more on our connected policies blogs check 'Data-led Brokerage' 'Always-On Underwriting' and 'Differentiation Through Data'.