The nature of ransom is changing
Kidnap and Ransom (K&R) insurance proved a perhaps unexpected source of cover for businesses that fell victim to last year’s sharp increase in ransomware attacks. As the upward trend for such cyber-extortion events is predicted to continue, how will the K&R market respond? While some K&R insurers will look to introduce deductibles or limit cover, preferring to leave cover for ransomware attacks to cyber insurers, others will recognise that their expertise in managing ransom crisis response puts them at an advantage from which they can capitalise by refocusing their products. Arguably, the solution lies in an integrated/hybrid insurance product, but either way, K&R insurers cannot afford to stand still.
Increasing use of autonomous systems potentially beneficial to marine insurers
Ship owners are already introducing autonomous systems to pave the way for crewless vessels. Not only will those systems help vessels become safer, but the data they produce will allow marine insurers to manage their risks better. Maersk, working with Sea Machines Robotics, is testing an artificial intelligence-powered situational awareness system (similar to advanced driver-assistance systems found in cars) aboard one of its container ships. The development of such systems, and the data they produce, is increasing the scope for telematics in shipping. With companies such as Concirrus and Windward helping facilitate the processing of this data, marine insurers can access real-time information about their risks to help augment both the underwriting and claims processes.
3D printing set to impact marine and energy markets in numerous ways
In late 2017, Dutch shipbuilder Damen received class approval for the world’s first 3D printed ship propeller. As 3D printers become more sophisticated and quicker, the possibilities for their use and potential impact will continue to grow. For the maritime and energy markets, one clear benefit will be in relation to losses caused by machinery breakdown. Where previously there may have been a long lead time for repair while replacement parts were ordered and delivered, onsite 3D printers could produce suitable, made-to-specification replacement parts in a matter of hours.
On the negative side, ING has predicted that 3D printing could cut trade by 40%. With manufacturers able to produce products locally and cost-efficiently, without the need to ship those same products from distant shores, ship owners will come under increasing pressure to shift trading patterns to transporting ore and essential raw materials for the manufacture of specific products.
The full 'Insurance Remodelled: 2018/19 Market Conditions and Trends' Report can be accessed here: