Ahead of this year’s IUMI gathering in Cape Town, South Africa, IMN spoke to John Wilkinson, Chief Executive of Global Marine Partnership, Munich Re, about the challenges and opportunities facing the marine sector in insurance and reinsurance. He said that it was “important that as an industry we stay relevant”, and that the industry move its product solutions along, “because otherwise I fear that you will have a dwindling pot of premium to pay ever-more significant claims”.
The company sees big data, IoT, cyber and blockchain as challenging developments but with these new risks come new opportunities. More accurate data is the key which will allow insurers to tailor existing products, as well as develop the new products required, to adapt and embrace the new exposures that arise in the interconnected world.
Referring to last year’s natural catastrophes, particularly the three major Atlantic hurricanes, Wilkinson said that even the marine losses were significant. Some of the marine lines were loss making even before the hurricanes came along, so the pressure on the sector has increased significantly. Referring to hull, he noted that “every time you go to IUMI they say ‘it’s another year when hull didn’t make any money’. Well, we write virtually no more blue water hull because, at the end of the day we believe, and all of our models tell us, and IUMI tells us that it is very difficult to make a profit in this class, so why would you encourage your underwriters to write such business? Wilkinson felt that this was a class where something had to change. Across other marine lines of business there were few areas where people were making significant amounts of money, which meant that there weren’t too many places to run any more. “As an industry we need to price these things properly” because there was “a huge need for sustainable natural catastrophe cover thus this industry must be able to survive, and hopefully thrive.”
That said, Wilkinson emphasized that he was an optimist, provided the industry invested in the future. “We need to come up with new solutions; we need to take advantage of the opportunities that are there, and not shy away from them. They are challenging, they do require us to work to get our heads around them. But I do think that coming up with new solutions is something which insurance and reinsurance has been good at over the many years it has been operating.”
“The industry has to move with the market and stay relevant to provide solutions for today and tomorrow, and not for the marine industry as it was three decades ago. It’s our task as marine insurers to take on a bigger role, to invest in the future and put ourselves forward as the key nexus of the interconnected relationships.”
(IMN will be posting the full interview with John Wilkinson on the Insurance Marine News web site – www.insurancemarinenews.com – later this week.)