How will marine underwriters capture the benefits of digitalization? asks IUMI

The passing into law yesterday September 20th of the UK electronic trade documents act (see previous story) coincided with IUMI’s Big Data and Digitalization Report. Patrizia Kern-Ferretti, Chair of IUMI’s Big Data and Digitalisation Forum said at the IUMI 2023 conference, being held this year in Edinburgh, that it was gratifying to see our industry continue to adopt the digitalization process but there is concern that we might be moving too slowly”.

Bills of lading (BL) provide for receipt of goods, evidence of a contract of carriage, and document of title and are used prolifically throughout the global supply chain. Delegates heard how the Digital Container Shipping Association (DCSA) – a non-profit association – was working to transform paper-based original BLs into data flow based on DCSA standards. Its members represent 70% of global container trade. They have committed to issue 50% of their BLs digitally within five years, and 100% by 2030. It was noted that this would mark a significant change in how business is currently conducted.

Kern-Ferretti said that “efficient marine insurance relies heavily on the availability of good-quality data. Fully digitalizing bills of lading gives the potential for underwriters to access behavioural data coupled with predictive opportunities arising from AI. In short, the more data we can access, the more analysis and insights we can gather and this will translate into better pricing, overall management, claims handling and loss prevention.”

However the big question was, “how will the marine insurance industry capture the value of digitalization, not just for its own benefit but also for the benefit of the assureds?”. That’s why it is so important to debate this topic at this year’s conference”.