, Singapore

Inside Concirrus' Asian expansion and helping marine insurers with data analytics

Rising premiums and digitisation present a faster and positive recovery for the sector.

The pandemic has not spared the marine insurance sector, which has affected the sector’s landscape and exposed concerns about shipowners’ protection and indemnity (P&I) coverage, according to a Marsh report. To make matters worse, the crisis coincided with the “hardening” of the industry, and restoring profitability and tapping new opportunities very much remain the priority, Concirrus Asia client development director Mike Davies said.

“Even prior to COVID-19, a number of insurance companies had withdrawn from the marine market, driven by volatile results and poor performance, and this cycle of shrinking capacity is still in motion,” Davies and fellow Concirrus Asia client development director Oliver Miloschewsky said.

The good news is, they countered, marine insurance premiums have risen and insurers are well-placed to benefit from the recovery in Asia which is expected to be faster than the rest of the world. "This, in conjunction with the accelerated push to digitalise, points to a positive recovery for marine insurers who have the vision and strategy in place to act quickly and maximise this opportunity."

London-headquartered insurtech Concirrus offers marine insurance analytics and real-time risk management through its platform Quest Marine. In January, it announced the expansion of its commercial offerings to Asia with the hiring of Davies and Miloschewsky. Speaking to Insurance Asia, Davies and Miloschewsky talked about their impressions on the Asian marine market, their main goals in the region, and how they help insurers with data analytics and adoption.

Can you give an overview of the Asian marine insurance market, especially since both of you have extensive experience in the sector?

With Asia representing the largest and fastest growing continental economy in the world, the major marine insurance markets of Singapore, Hong Kong and Shanghai have matured into well-established hubs for business and insurance. It has not all been smooth sailing, however. For many years, the market in Asia suffered from intense global competition, which led to marine results being marginalised. Something had to change.

In recent years, we have seen a significant realignment of the marine market for the better, with withdrawals of capacity and the launch of innovative digital insurtechs revolutionising the way the industry operates. The release of 2020’s market results will reveal that underwriting results are already starting to improve.

What is clear is that marine underwriting companies must harness the power of data analytics in order to maintain profitability and open up new opportunities and revenue streams. Asia is extremely well placed to take advantage of this new world with its focus on insurtech and big data - it’s an exciting time for the industry here.

What are your main goals now that Concirrus is expanding to Asia? What pain points are you planning to address early on?

Concirrus has achieved significant success in the UK marine market working with clients including Marsh, Skuld and Beazley. As a result, we have accumulated substantial anonymised underwriting and claims data into our Quest Marine market model. Now that we have launched commercial operations in Asia, our goal is to partner with local and regional insurers and brokers to help them solve their three most pressing challenges—improving profitability, reducing operational expenses, and ensuring portfolio growth.

By giving Asia’s insurers and brokers access to previously unavailable data and analytics, they will have the ability to underwrite their existing portfolio more successfully, and confidentially expand into new risk areas knowing that their decisions are based upon proven behavioural data.

Can you tell more about your product Quest Marine and how it stands out from other platforms in the market?

Quest Marine ultimately equips marine insurance professionals to make better risk and pricing decisions. The platform is powered by bespoke machine learning applied to a vast and varied dataset, revealing behavioural trends and expected losses that are indicative of risk at vessel and account level.

At portfolio level, this translates to significantly improved loss ratios of 10%-25%, plus the ability to use analytics to grow the book in new target segments. We have platforms tailored to Hull & Cargo. Add to this the ability to automate submission management, and monitor aggregation and sanctions in real time, and you have a marine analytics solution that is as unique as it is powerful.

How important is it for insurers to adapt a data-driven approach to marine insurance, and what are the most immediate benefits of doing so?

Put simply, adopting a data-driven approach is critical to ensure profitability, operational efficiency and portfolio growth.

All insurers have historical data within their existing portfolio. However, they are not necessarily resourced to take full advantage of this data, which can be limiting when looking to grow or expand into new areas of marine risk. Concirrus will cleanse the insurer’s own data and convert it into a dataset that allows them to clearly see the strengths and weaknesses of their portfolio. We will also provide the insurer with access to a much broader market model as well as global data, including historical and real time vessel movement, performance and technical management, global casualty and weather analysis, and accumulation of vessels and cargo in ports and high-risk areas, including sanctions and war zones.

Concirrus can also help prioritise the submissions the underwriter receives depending on their appetite and targeted market segment. The immediate and long-term benefit is a much more productive use of time, as insurers are able to focus on the most relevant risks and make much better informed underwriting decisions, resulting in a more balanced and profitable portfolio.

How can you help insurers overcome challenges to AI adoption, for example access to quality data and legacy systems?

Digital transformation is as inevitable as it is powerful and challenging to execute. We have partnered with numerous insurance specialists to transform their marine business and it is this experience, coupled with the diversity of our team, that ensures successful execution.

For example, take legacy systems which are typically product-line agnostic. We can help with everything from strategic direction around system selection, all the way to the hands-on development of APIs to unlock value out of existing mainframes. Data cleansing, categorisation and enrichment are other great examples of how the Concirrus team can partner with insurers to successfully transform their business.

What is your outlook for Concirrus in Asia over the next five years?

We are passionate about Asia, its growth and the opportunities it presents. Over the next five years, we envision Concirrus becoming the trusted partner of insurers throughout the region, managing third-party data that will fuel the transformation of the specialty insurance and broader maritime industry.

Right now, we are experiencing a pivotal moment of digital transformation, and marine analytics is still in its early stages. It is important to remember that technology develops exponentially—processing power doubles every 18 months! This means that in five years’ time, we will see incredibly sophisticated tools that enable better capital management and smarter ways of working in a digitalised marine insurance marketplace, where underwriters, brokers and shipowners alike focus on discussions that really matter and add value. Concirrus will be front and centre in that market development.

Photo courtesy of Pexels.com.

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