Aggregations are a critical part of risk assessment. Knowing what total exposure lies within a region prepares Insurers for seasonal events, as well as determine an appropriate response. Both the proactive and reactive approach to aggregations involves manual analysis, with Underwriters searching paper records to total up values on a separate document. Digitalisation can deliver a vast array of benefits around both complex areas of business, like pricing, or simple but arduous analysis, like aggregations. A live map showing last known vessel locations can make a huge difference to daily operations and provide new ways of working that optimise accounts.
“Understanding the impact of weather events, particularly those that are seasonal such as hurricanes and tropical storms, often leads to days or even weeks of analysis. Inefficiencies are emphasised when assessing events for a live portfolio due to the nature of moving assets. This makes the margin for error significant. An on-going, automated analysis of ever-changing high-risk events can make assessments more accurate and change the way insurers structure future business.” – Ryan Matthews, Head of Customer Success at Concirrus and former Underwriter.
Digitise: a new view of on cover vessels
A live map, like the one seen in Quest Marine, utilises the signal from a vessels Automated Identification System (AIS) and plots the last known location on a map. As data is received, the location changes in real-time. Considering the limitations of AIS, dark activity may occur. In this instance the last known location remains visible until the signal is next received.
Some dark activity is also due to a lack of infrastructure to pick up a unique signal in a particular region, or high congestion causing signal noise. To mitigate the limitations of existing technology, multiple location providers can be utilised. The additional data can populate dark areas, but also ensure existing location data is accurate by providing a control. Concirrus uses multiple providers, one of which is Spire, who have a network of near-earth orbit satellites that are dedicated to AIS signals. This means they can discern unique vessels in high traffic zones and secure coverage in areas where land transponders are less frequent. Signals are also received more frequently, improving location accuracy.
Fig 1: Graph showing the frequency of AIS signals received.
Some AIS signals appear in two places at once. This is known as spoofing and can be due to a transponder being cloned, or error during data collection. Machine learning can account for such discrepancies and ensure they don’t affect analysis.
“Transponder usage and MMSI numbers often help identify and separate a cloned signal from a legitimate one. Alternative methods focus on optimizing signals relative to the vessel path over time based on using algorithms, like genetic optimization and clustering, mitigating the influence of anomalies.” – Jorrit Peters, Lead Data Scientist at Concirrus.
By utilising multiple data sources and data science, we can mitigate the technological implications of using AIS to determine ship locations. When combined with an optimised code base to ensure a responsive user experience, you have an accurate real-time positioning data set to move forward with.
Analyse: Create zones and automate alerts to stakeholders
Understanding where on cover vessels are in real-time means assessing aggregations becomes very simple. As Quest Marine’s live map is part of a broader analytics platform, you can access a vast array of information relating to each vessel, including expected loss values. By creating a zone for any area of interest, you can see the total value of insured assets located within or enter the zone.
The Ever Given was a high-profile example of an event that led to a considerable build up of vessels. Understanding the total value of aggregations in this region over time was as simple as creating a zone to assess the total sum insured in the region, but also understand how it changed in real-time.
Fig 2: An example of vessel aggregations and a potential monitoring zone for the Suez Canal.
Alerts can be set up for a zone that inform those you deem as key stakeholders. This can be any area of the business, including loss prevention, claims, etc. As vessels enter the zone, alerts will be sent to ensure the situation is continually monitored and measures can be put in place.
“Drawing on big data to improve the accuracy of information relating to factors such as total value, movement, ownership, maintenance and ultimately behaviour means that we can understand exposure in more detail. Predictive analytics lets us process information to derive and expected loss value for every vessel at any point in time. A live view of how these totals change within a region over time means Underwriters can better understand live events and focus on their response.” – Ryan Matthews, Head of Customer Success at Concirrus and former Underwriter.
A recent client webinar demonstrated the use of zones and alerts for a hurricane scenario. You can watch the highlights below:
For a longer version of this video, click here.
Optimise: Faster response times, automated policy updates and new services
The live map offers the basis on which connected policies can be derived. Automating updates to a policy based on an alert stating a vessel has entered a zone reduces administration, whilst ensuring both the Insured and the Insurer retain adequate cover. At scale, this can save Underwriters a lot of time that can be spent further understanding the market and building relationships.
War zones offer a good example of a policy that can automatically update to pre-determined terms given location. As a vessel enters a war zone, regardless of intent, Quest can automatically alert the Underwriter and any other member of the organisation tied to the alert. The policy will update immediately to the new terms to ensure that vessel is covered during its duration. When it leaves, the terms can revert to the original agreement, or remain depending on the contract.
Hurricanes offer a unique perspective where zones change in real-time. A new development for the live map in Quest Marine will be to overlay live weather data. This will mean that Underwriters will no longer have to create custom zones in line with a weather prediction. The hurricane path will act as an independent zone and update in real-time, avoiding a reliance on predictions and ensuring an accurate understanding of events as they unfold.
A simple tool like the live map has huge implications, moving Underwriters towards a continuous, ‘always-on’ view of the market. On cover vessels will always be observed and any changes in circumstances that are deemed critical will cause a proactive callout for response. New policies, and business models can draw on such functionality, including mileage payment structures and customer service benefits.