Insurance brokers mull opportunities in marine business as Covid-19, technology changes trend
Insurance brokers under the umbrella body of the Nigerian Council of Registered Insurance Brokers (NCRIB) Lagos Area Committee (LAC) are making efforts to see opportunities in marine cargo business after the disruptions brought by Covid-19 pandemic across sectors of the economy.
The brokers believe that equipping its members with knowledge on trends in the space, particularly as technology is redefining the business environment would make them more relevant, increase their contribution to industry premium and support growth of the economy.
Tairat Onibudo, head, Facultative Underwriting at Continental Reinsurance speaking at the NCRIB LAC hybrid Monthly Meeting held in Lagos said The COVID-19 pandemic has caused unprecedented disruption to the global economy and world trade affecting manufacturing, supply chain and demand, and has a direct impact on exposures insured including volume, accumulations in port and aboard vessels.
According to her, COVID-19 virus has injected significant uncertainty into future world trade forecasts in terms of values, volumes and changing trade patterns.
Another consequence of COVID is that people are travelling less and generally, this has also translated into a lower utilisation of certain vessel such as container ships, yachts among others.
Rotimi Olukorede, chairman, NCRIB LAC hard noted in his welcome remark shirking business premium income from marine due to weak regulation on the industry, activities of touts who continue to divert premium meant for the industry.
He said that this is why an executive action or legislation impacting on marine insurance industry in Nigeria or having a potential of promoting the growth of this sector must be taken seriously.
Olukorde said speaking on the theme “Marine Insurance and its Contemporary Issues” is apt to sensitise the marine insurance sector and make sure this works well for the benefit of all stakeholders.
Onibudo speaking on impact on cargo said, as a result of Covid-19, a simultaneous supply and demand shock affected global value chains, due to introduced compulsory lockdowns which resulted in forced production stoppages, restricted travel as well overall lower consumer confidence. This is also increasing the likelihood of damage to vulnerable cargoes such a refrigerated goods.
However, activities had started picking up and we hope for positive shift soon.
“Whilst it is encouraging to see the 2020 premium base growing from the previous year alongside improvements in loss ratios, the class of cover has suffered technical underwriting losses almost every year since 2005 and premium had sustained decline since 2012.
“The ocean hull market has been operating unsustainably for many years and is now at a level where premiums will cover attrition losses only.
Furthermore, the hull market is continuing to suffer from an ever-ageing fleets coupled with depressed prices/rates.”
She further observed that prior to Covid, our businesses entails physical dealings. COVID has exposed this as unsustainable. Today, things had changed because the pandemic has also brought to light the fact that digitalization needs to be in focus for the maritime and other industries.
“To be truly effective in how we assess and price these risks all Stakeholders need to understand that digitalisation is here to stay and recognise it as an opportunity to improve the services that we are offering to our assureds”.
At the just concluded International Union of Marine Insurance (IUMI) Conference held this September 2021 it was discussed that embracing digitalization will bring new opportunities and discipline to marine underwriting.
Marine insurance has entered a new era that will deliver opportunities to those stakeholders who embrace technology and harness its power.
“To drive the fundamental changes needed over the next decades in our businesses, we need to think holistically about the entire supply chain ecosystem, leverage on new data, and actively partner to develop the marine portfolio at a desired scale.”
Within marine insurance, COVID has sped up the shift towards online placements, the development of remote casualty surveys, and the increased adoption of digitalization, Onibudo said.
“Whilst the full impact of the pandemic is yet to be played out, these changes are here to stay”.