The Covid-19 pandemic has quickly brought to bear the significant role digital technologies can play in ensuring businesses continue to effectively operate remotely. Although the marine insurance industry has previously debated the benefits of digitalisation, unprecedented times like the global health crisis we face now, puts sharp focus on the need to accelerate their digital strategy.
Recent weeks have seen high profile organisations introduce dedicated roles demonstrating their commitment to digitalisation. Swiss Re appointed Ian Haycock as Chief Data Officer from 1 May. Allianz Global Corporate & Specialty named Ali Shahkaram as its first Chief Data Officer, responsible for AGCS’s data strategy. And Pete D’Orsi joined Liberty Mutual as their Chief Data and analytics officer, a new role for the company.
During a recent IUMI webinar focused on digital transformation, 250 members of marine insurance community were surveyed to find out how their toolkit had changed whilst working from home and the results were fascinating.
"In the last 6-weeks how many new digital technologies have you incorporated into your work? "
Half of respondents had added 2-3 new digital technologies to their toolset, with 14 percent having to get to grips with more than 3.
13 percent had not adopted any new tools suggesting that they were either well equipped for remote working or have tried to manage without.
Speaking in the first episode of the Maritime CEO Leader Series Bjørn Højgaard, CEO of Anglo-Eastern recently said “The way we have adopted technology over the last few weeks will have a lasting impact.”
With almost 90% of respondents having introduced new digital technology to their toolkit in recent weeks, when it comes to digital transformation, are organisations on the right path?
My advice to organisations looking to advance their digital strategy has always been to start with the end in mind. Have an ambitious vision for an optimised digital environment but balance it with practical short-term goals that move you closer to your long-term vision.
Concirrus breaks down the short-term goals into four stages of digitalisation:1. Digital interaction between individuals
2. Digital data and processes
3. Analysis and pricing of risk
4. Dynamic portfolio management
Here we take a closer look at each stage:
Stage 1: Digital interaction between individuals
Never before has digital interaction been so important for organisations to continue to trade. Historically, the majority of business in the marine insurance market has been transacted in a face-to-face environment supported by digital tools. Covid-19 has forced many organisations to pivot, relying heavily on digital tools to maintain and develop relationships to keep business deals moving. Communication is key and taking this first step to digitalisation helps highlight inefficiencies and tighten up processes.
Stage 2: Digital data and processes
Capturing and transmitting data digitally is the next step in an effective digitalisation strategy. Most organisations can achieve stage 2 fairly quickly. Developing a comprehensive set of data for your organisation to draw from allows you to codify the knowledge and experience held within your teams for the greater good of the business. Remote conversations are more productive when you are able to discuss the meaning of the data and understanding the ‘behaviours’ in the market that you are seeing. When your team have access to a single source of more data, they can use it effectively to make better business decisions, faster.
For many organisations, stage 2 may be deemed ‘good enough’ and when you’re operating in normal conditions this can work well. However, we find ourselves in a time where things can change rapidly and operating efficiently at this level of digitalisation can become challenging.
Stage three and four is where digitalisation and digital transformation becomes compelling.
Stage 3: Analysis and pricing of risk
Once your data and processes are digitalised, you can start to model risks within seconds. In a world where risks can change rapidly, having the ability to analyse large and varied datasets quickly, assess the impact and make data-driven decisions can be a game changer for your business. No two accounts are the same and demand for more accurate and competitive pricing is increasing.
Vessel operators are looking to insurers to offer rebates in line with the reduced levels of activity they’ve seen in recent weeks. This level of service is only achievable if you can access the behaviour data for an account. We’ve seen insurers in the automotive space adopt similar approaches, proactively reducing premiums to allow for reductions in mileage and usage and we’re likely to see similar, more flexible initiatives in marine.
Stage 4: Dynamic portfolio management
The Covid-19 pandemic has affected businesses globally and the maritime industry are looking to insurers to help them through this uncertain time. With a real-time view of risk throughout your portfolio, you can identify changes instantly, what it means to your business and respond to select new business as appropriate and understand aggregate exposure.
In order to better understand which of the four stages of digitalisation our audience was at; we ran a poll and the results can be seen below.
A staggering 37% believe that their organisation is only at stage 1 of digitalisation with 26% having achieved stage 2 by getting digital data and processes in place. The results of the poll indicate that there is still a long way for the industry to go to realise the true benefits of digitalisation.
The real eye opener for me is that 37% of respondents have already begun to release the potential of their data through analysis and dynamic portfolio management. This means that 63% of our respondents are now at a disadvantage when it comes to renewals or writing new business.
To the 26% that have started to digitalise your data, you’re in a great place to start leveraging all your hard work and do something really compelling from this point.
We can no longer rely on events of the past to price the risks of the future. To weather the storm, we must trust in prospective knowledge. Now more than ever, we need the industry to embrace digitalisation, to help us understand the current landscape and to drive innovation to better serve our clients in the future.
And don’t miss out on the first in a series of dedicated webinars focused on Marine Insurance.
Keynote: Richard Turner, President, IUMI
COVID-19 has had a huge impact on people's health, lifestyle and patterns of working. More widely, global economic prospects carry significant uncertainty. What has been the experience in the marine market? Is COVID the only major issue to be confronted? What are the prospects for the future?
11.15-11.45: Panel Discussion: Covid-19: A Trigger for Long-Term Change in the London Market?
The panel will be sharing their experiences from the last six weeks and discussing how the London Market may change as a result.
Following the keynote and panel we will be hosting a live Q&A session with all speakers.