COVID-19 is shifting the current in the oldest form of insurance in the world. Here are four ways agents are serving their commercial marine clients.
As in most industries, commercial marine underwriters and agents are working remotely, reviewing submissions, writing policies and focusing on keeping their clients covered. They have grown more comfortable with the technology that is keeping everyone connected. And while the pandemic is a tragedy of immense proportions, it is leading to innovation, even in the oldest form of insurance in the world.
While the long-term future for marine cargo looks bright, the commercial marine insurance market is going through a period of upheaval. As cargo ships are laid up in locations around the globe, raw materials and commodities are being stored for extended periods of time in warehouses, and crew members receive testing for COVID-19 as they cycle off vessels, life at sea is facing increased challenges.
Through it all, here are four ways commercial marine agents are serving their clients:
1) Technology. “There is a trend of carriers, agents and brokers adopting more technology to help us boost our effectiveness and reach new markets," says Anne Marie Elder, global chief underwriting officer, marine, AXA XL. “Carriers are looking very closely at which distributors are developing alternative ways to reach a broader client base using an electronic submission platform that may improve efficiency or lower costs."
The shipping industry has been trying for years to update the use of technology, especially in their logistical processes. “Of course, the more automated and electronic systems we have that provide access to data, the better underwriting algorithms we create," says John Gambino, cargo manager, RB Jones Marine. “But I would say that we're still in the early days of that."
Commercial vessels perform a vital function of a marine operation, so it is essential for the owners and operators to have the proper insurance to prevent unnecessary loss. Keeping clients aware of existing or new product offerings, as well as success stories, is critical. “This is a people business, albeit now a virtual people business," Elder says. “Underwriters and agents who embrace the challenge and are responsive will do well."
2) Exclusions. “The marine market will be introducing cyber and communicable disease exclusions," says Robert Gallagher, president of ocean marine, Intact Insurance Specialty Solutions. “The U.S. and London markets have introduced various cyber exclusions that vary depending on the risk."
“Early communicable disease exclusions varied widely by company and made it difficult for agents to decipher what was excluded," Gallagher says. “The U.S. market, through the American Institute of Marine Underwriters, and the London market have now introduced exclusions that appear to be gaining traction in the marketplace."
As the marine insurance industry increasingly adopts more technology, agents need to be aware that policies most likely will include such an exclusion at renewal. Navigating the myriad of new exposures and exclusions due to COVID-19 will be no small feat.
Keeping abreast of any changes in sanctions applying to the industry is another area where agents need to pay attention to ensure coverage is not withdrawn at any stage of the coverage policy period.
3) Knowledge. “My number one tip for agents is to know your client and their operation," Gallagher says. “Agents should educate their clients that price is not the only factor to consider when selecting an insurance carrier. The lowest-priced market today may not be available next year. The carrier's longevity in marine insurance and the services they provide should also be considered."
Agents focusing on the commercial marine market could benefit and receive assistance from working closely with underwriters specializing in the marketplace. “In my experience, information and insight into a customer's supply chain is best articulated by those that are actively engaged in the shipping process," says Drew Feldman, senior vice president, property, marine and equipment breakdown, CNA. “This is also where your marine carriers' underwriter can assist you in gathering relevant information" and help you “become a trusted advisor on marine risk," he adds.
4) Communication. As in every insurance market, communication is key to getting the coverage you require for your client. “Get as much detail on the client and what they are doing in this new world and make sure that that's what is presented to underwriters in good time so we can start discussions as early as possible," says Mark Engel, managing director, marine, RB Jones. “We're finding that if you don't get out in the market early, then it's a fire drill two days prior to the renewal."
Olivia Overman is IA content editor.