Leading figures in maritime insurance are beginning to reimagine how they can serve an industry hit by the Covid-19 pandemic.
And one major shake-up could be a move away from annual policies for shipowners.
During sustainable shipping pressure group Global Maritime Forum (GMF)'s Virtual High-Level Meeting, Marcus Baker, global head of marine and cargo at Marsh JLT Specialty, was asked whether insurance can be a force for change, or just another expense for shipping companies.
He responded: "Our industry goes back such a long way, but what we're beginning to see is the use of data, and I think data and behaviour analytics are going to allow us to develop not only more accurate pricing, but also better products.
"The issue with climate change is another factor we're going to be able to look at pricing into insurance products. I don't think it's really priced in at the moment."
And he added: "An annual policy for insurance cover — does that really make sense any more? Are there better ways we can do this in terms of just continuous policies? Probably.
"I do think the pandemic has helped to force some of this change, or at least has got people thinking in a slightly different way, and that can only be good for the industry."
Baker said industry players need only look at rising sea levels to see one of the potential challenges facing the sector in terms of ports and terminal cover.
"Is potential property damage impact priced in? Probably not," he said.
"Maybe it's not an essential risk factor at this stage, but it's definitely something we need to be looking out for, and I suspect in time, and if we can get rid of multi-year policies, it might actually put us in a better place."
International Union of Marine Insurance (IUMI) president Richard Turner was more circumspect, however.
A chance to rethink the product
"There is a significant financial impact to the insurance sector from Covid. It's been estimated at $200bn. Half of that is claims activity and half is investment effects," he said.
However, he said not much of that has been in the marine insurance sector.
But he believes the situation creates an opportunity for the industry to "rethink the product it's selling, to reimagine it and to be thoughtful about the step changes that are taking place in the maritime sector".
"Covid more often than not has sped things up, but these were trends that were already starting to happen. I'm not so sure that Covid has created a whole new framework of things," Turner added.
"The operational side was already moving more digital."
But he did acknowledge that flooding caused by sea-level surges in storm conditions that in the past were one-in-100-year events will, by the middle of this century, be annual.
Baker, meanwhile, predicted the pandemic crisis will lead to more bankruptcies, consolidations and scrapping, while at the same time depressing the rate of newbuilding orders.
"This is all coming as a result of the pandemic," he said.
The webinar also discussed the issue of cyber-attacks following digital raids on the International Maritime Organization and CMA CGM in recent days.
More innovation already
Turner said: "One of the interesting developments from the insurance side is you are seeing more and more innovation in that space and the development of products to protect shipowners' operations both in terms of the shipping side and the shore-based side.
"From speaking to people, they are definitely seeing an increase in [cyber-attack] activity."
Baker added: "It's honestly an issue that seems to be accelerating."
But cyber-attacks have slipped down the list of concerns in the GMF's, Marsh's and the IUMI's Global Maritime Issues Monitor survey of industry leaders for 2020.
"I can only think our respondents feel a little more comfortable with technology," Baker commented.
The report warns that shipping players believe they are not prepared for the next pandemic.
