Andrew Yeoman, CEO at Concirrus explains that data availability is now at a point where the market can truly look to better address the threat from cargo accumulations.
Recent years have highlighted the scale of cargo accumulation risks, and why the market needs to look at how it can get a true understanding of the exposures written.
Hurricane Ian is estimated to have cost the marine market $5 billion from losses across the US east coast causing damage from high winds and storm surge. This is on top of continued pressures on the global supply chain.
But it is not only natural catastrophes we need to consider. The fire and explosion at the Port of Tianjin in 2015 cost marine underwriters more than $1 billion, the explosion at the Port of Beirut is estimated at $3 billion, and Felicity Ace estimated at $500m.
However, we now live in the era of data, and it will be data, coupled with trust, which will finally provide the insured, the broker, insurer, and reinsurer with the opportunity to truly understand their accumulation risks.
Detailed cargo data will allow the insurer to truly understand the risk and rate it accurately. For re/insurers, it will also enable the creation of a complete picture of exposures, and with it their aggregation risks.
However, to do so, trust will be key. For the market to be able to build a full picture, it will require brokers, insurers, and reinsurers to share the data which will enable the industry to better model their cargo risks.
The market can ill afford to deal with the scale of losses it has faced in recent years. It needs to lower claims, but to do so, it needs to make better use of data throughout the transactional process.
The systems are in place that will allow the data to be analysed and understood, but the sector must find a way to access the necessary data and it may well require those in the market to be willing to share data for the collective good.
Innovative potential collaborators should contact Jake Jacobs (email@example.com) to explore how they could benefit from the solution.
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