Tsakos Group insurance director Andreas Bisbas has outlined shipowners’ concerns over the dramatic move to automated insurance risk pricing and placement in the London market.

Bisbas was speaking at the Shipping Risk Forum during London International Shipping Week.

His comments follow widespread praise for the rapid transformation in the marine insurance market toward digital processes, when brokers and underwriters were forced to work from home by the lockdown.

As the Lloyd’s and non-Lloyds insurance companies start to return to the City of London, Bisbas urged them not abandon the traditional face to face business — and relationship of trust — that has characterised the London market for centuries.

He said there is evidence, in some instances, that the use of algorithms has slowed down the underwriting process by removing the role of the underwriter.

Bisbas said that sometimes the purchase of data had been used as a “convenient substitute for meeting.”

He said owners like Tsakos, which spend millions of dollars to the insurance market annually, should not have their insurance placement handled as if it were online car insurance.

Free thinking

While conceding that electronic placement had a role to play, he said it should support rather than substitute the “ability for an underwriter to be agile and free thinking”.

If underwriters become constrained by data that could impact on the London market he suggested. “Overseas markets might be where the creativity is found, and London where excess capacity is sought,” he said.

Andrew Yeoman, chief executive of Concirrus, said the move to digitalisation is invetiable. Photo: Concirrus

One of the leading providers of digital and automated pricing and placement services to the London insurance market is Concirrus.

Chief executive Andrew Yeoman insisted it is not his intention to remove the underwriter from the insurance placement process. “We want underwriters to use their judgement,” he said.

Which way to turn

He likened the use of data in the London market to Google Maps, which simply provides several route options to the user. “It is up to you which way you turn,” he said.

He said the addition of data made insurance experts more productive. “It is not making the decision for you,” he argued.

Yeoman was speaking on the day he announced the launch of Concirrus' digital marine insurance products to the North American Market.

Yeoman did not budge from his position that the move to automation in marine insurance is inevitable.

“We are headed to a future where all risk will be assessed algorithmically and traded digitally. Many insurers have the ambition to deliver innovative products to their customers, improve loss ratios, reduce operating expenses but are held back by legacy platforms and technology,” he said.

Bisbas countered by insisting that shipowners are looking for underwriters who understand their trade, business and circumstances.

“Replacing the physical relationship is not the right way forward,” he said.

“Shipowners will resist that and turn to someone who can write a bespoke cover for them.”