According to a McKinsey report, the impact of COVID-19 resulted in companies accelerating the digitisation of their customer and supply chain interactions and internal operations by three to four years. The portfolio share of digital or digitally-enabled products has accelerated by seven years since the pandemic’s outbreak, with some organisations achieving in a few weeks what might have taken several years under normal circumstances.
The Nordic marine insurance market is no exception. In a recent panel discussion hosted by Marine Insurance Nordics and moderated by Ole Thomas, Ronny Reppe, Co-founder – Noria Group, Christian Pritchard Davies, Chief Financial Officer – Gard AS, Alem Jasarevic, Chief Operating Officer – Skuld, and Ole Jorgen Eikanger, Chief Business Development Officer – Norwegian Hull Club addressed how the market has changed in recent months, which platforms have been adopted, and what the future holds for the industry.
Has COVID-19 accelerated digitisation in marine insurance?
For a long time, the marine insurance market has gotten by without any real incentive to modernise, but the panellists believe Nordic insurers have the capacity to be winners in today’s market.
Alem says digitisation in the marine insurance industry is finally headed in the right direction. “COVID-19 has been a good nudge for user adoption,” he explains. “The market and industry are becoming more digitally mature, but there is a long journey ahead.”
Equipped with the staffing, resources, expertise and a willingness to move the industry forward, marine insurers are well-suited to a digitisation journey. “Some of the most successful underwriters today are long standing mutuals, whose prime focus has always been their clients and members,” says Ole Thomas. “Subsequently, they should have the willingness and the ability to lead change and digitise the handling and transactions of marine and energy insurance.”
Four trends that will shape the marine insurance industry in 2021 (and beyond)
Automation and efficiency
“We spend a considerable amount of time on plain submissions but via the automation of tasks and integration of data sources we could significantly reduce that workload,” says Christian. For example, at present, “there are multiple hands punching the very same information into insurers’ systems of record. The vision should be for that information to be typed just once.”
When it comes to driving automation and efficiency, Ole Jorgen Eikanger believes that the biggest challenge will be figuring out how to address the unique needs of each client. “It’s
very difficult to automate the process of risk management [in marine insurance] because it’s so complicated, and there are so many different players in the market,” he says.
Digital customer journey
Several insurers are concerned that embracing digital tools will deplete meaningful and valuable face-to-face interactions. But Ronny believes that the vast majority of customers would prefer that their basic needs were met via technology. “[People] want to be able to log on to a platform and automatically download the necessary documents and invoices,” he says. That includes being able to quickly make changes to their insurance policy, such as adding or removing ships to their fleet.
In digitising these basic processes, insurers can devote their resources to addressing more complex and important customer interactions. “If someone phones their insurer once a year, they expect to speak to someone who can help them,” says Ronny. “When it comes to digitising the customer journey, many insurers have gone the wrong way. We need to focus on understanding and simplifying the basic needs of the customer.”
Christian shares Ronny’s views. “If I want to change the annual mileage on my auto insurance company, I certainly don’t want to pick up the phone and wait 30 minutes. I expect to be able to do that seamlessly via an online portal.” Marine insurance might well be very relationship-focussed, but that doesn’t mean the bread-and-butter transactions shouldn’t be automated. “Then we will save time for strategic discussions where we can really add value for our members and customers,” Christian adds.
Skuld has been working hard to digitise services for its clients, charter members, and brokers. For example, the company developed a solution for online charter declaration, which means users can declare their voyages online, saving Skuld and its members a lot of time and effort. “We are also digitising the process of registration and submitting payments for reimbursement claims,” says Alem.
Data and analytics
Is it realistic for the Nordic market to have an ambition to standardise their formats, asks Ole Thomas. “Today we have separate worksheets, PDF files, and word documents all over the place. How can we standardize the information that we receive from clients (or ask them to provide), put into spreadsheets, and pass back and forth?” When, if ever, will the industry achieve a uniform format to managing data of this kind?
“From my perspective, the market has fallen short when it comes to analysing its own data, let alone the data that our customers provide,” says Ronny. “Insurers need to be digging into their own data via a modern business intelligence tool to provide their stakeholders, internal claims handlers, and underwriters with better information to support their decision-making.”
Most crucially, better data management and analytics will help marine insurers to understand and price risks more effectively. “We can help prevent marine casualties and
protect seafarer lives through loss prevention initiatives,” says Christian. “It will also help us to make better pricing decisions, improve risk selection, and improve our products.”
Alem agrees. “Data and analytics can be leveraged to give targeted, relevant, and real-time loss prevention advice, as well as providing a more fine-tuned picture of risk and the risk selection process.”
Ronny also notes how good data management can help to show customers their individual needs are understood. “[Customers should have access to a] dashboard that benchmarks their fleet against other fleets and provides them with data to help them understand their business.”
Cooperation and joint platforms
At present, brokers often have to log in to multiple portals to acquire the information they need, because there are multiple systems that generate data, and in very different ways.
“A start is to agree on data standards within the Nordic marked to ensure seamless flow of data between the different parties. A suggestion would be to utilize the Acord standard”, says Ole Jørgen
Making a success of a digitisation journey
Alem provided three top tips for marine insurers hoping to succeed on their digitisation journey.
- Start by defining your objectives. Figure out what you ultimately want to achieve and work backwards from there.
- Ensure you have enough financial power to endure the journey.
- Secure user adoption along the way.