The development by IUMI of a major global claims database has progressed well in the past year with the completion of a pilot project, but much still needed to be done, according to Dave Matcham, CEO of London, UK based International Underwriting Association (IUA) who was speaking on the opening morning of the main IUMI 2018 conference in Cape Town, South Africa.
The project started 10 years ago and was resurrected last year. The aim was to “create a large and consistent loss database (for hull and cargo) with standardized data from member companies in order to analyze major losses with respect to loss severity, frequency, location and cause”.
Introducing Matcham, Don Harrell, chair of IUMI’s facts and figures committee, said that “the next step in the process is to widen the network of contributors to include as many IUMI member associations as possible. This is likely to take some time as many do not currently request this data from their own national memberships and will need to implement a process to do so. Working with the Boston Consulting Group, we will create a reporting framework for our members to help standardize the data we expect to receive from an ever-widening constituency. We recognize that our database is a work-in-progress, but we are delighted to have proved the concept and built a solid foundation on which to move forward”.
Matcham said that IUMI believed that it could produce a database that no insurer could produce on its own. “We wanted to produce something unique”, he said. The database is supported by non-disclosure agreements with Boston Consulting, IUMI and the contributing associations. In 2018 IUMI went from initial idea via feasibility and conceptualization to piloting data collection and first analyses.
Data is submitted anonymously; and to avoid overlap, data is only collected from national organizations where their members have led on a particular claim.
Matcham said that the progress over the previous 12 months had been discussed in committee the day before. The pilot generated 1,200 claims data over a four-year period of $250,000-plus claims (although some restricted themselves to $500,000-plus). Belgium, Germany, Netherlands and Sweden participated in hull and cargo; Singapore and Japan participated in cargo alone. Matcham said that the committee was aware of the danger of double counting. In addition, while some of the returned data was consistent, some was less consistent and some was missing. Matcham said that IUMI’s experience of the past year had enabled it to design an IUMI template.
Of the data collected so far, 6% of losses made up 50% of loss claims paid. Matcham said that IUMI would be working with the associations on the areas where the data submitted was either inconsistent or missing (IMO number, vessel name, both of which had a low availability in the pilot, but which should be collectible) and type of vessel, type of cargo standard industrial classification and Event Name, all of which had a low availability in the pilot and which will not be implemented in the 2019 template. IUMI will be working with the six associations on that point. Matcham said that other associations we’re waiting to participate. “About 12 said either count me in now or in the next year”, he said, adding that IUMI would be “conferring with the six pilot countries on how to update the template to make the responses more consistent. “We have learnt a lot this year, so we can explain the value benefit much better. There is clearly a good population of data out there from which we can improve this database”, said Matcham. Eventually, he said, the displayed charts would be statistically significant and will provide data which will be unobtainable anywhere else.