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Op-Ed: Reframing Marine Insurance to Meet Shipping Challenges

Written by

Heather Ervin

Gonzalo Mera Truffini, Executive Director Americas, MIS Marine

By Gonzalo Mera Truffini, Executive Director Americas, MIS Marine

As the maritime industry faces a pivotal decade, driven by the need to accelerate sustainability and embrace digitalization, more emphasis needs to be placed on the benefits and differential role of technology and data in real time to support maritime security and decarbonization.

Since maritime transport has existed, the nature of the risks facing ships has never stopped, let alone waited for the industry to act in the face of these risks. Shipping continues to evolve today, especially as we simultaneously seek to decarbonize and digitize ship operations. This transformation has now brought shipping to an inflection point, where the ability to access accurate real-time data plays a critical role in raising safety and environmental standards.

It is essential that shipowners, operators and managers in the shipping and energy sectors continue to deepen their understanding of how the risks associated with any transformation can impact the long-term prospects of their business, while focusing on the day-to-day fundamentals of safe and clean shipping and operational performance.

In this new era, marine insurance can be the answer to solve the double challenge of decarbonization and digitalization. But first, the industry needs to understand why this is so important to its business and its future.

In short, marine insurance is a holistic and systematic analysis of the various issues involved in maritime and offshore activities used to ensure safe, environmentally friendly and reliable operations. This includes a self-assessment of different types of vessels, including tankers, dry bulks, tugs and offshore vessels.

AUDITED PROCESSES

Processes audited include operator assessments, safety surveys, terminal and interface scans (any point where multiple systems and processes are used when a ship’s cargo is transferred from one ship to another or from a ship at a terminal, for example), as well as port State inspections. These are standardized questionnaires that cover all aspects of operational quality to produce a score that is used as a benchmark against KPIs for different contracts and circumstances and ideally shows continuous improvement over time. This can then serve as the basis for a physical audit that verifies the self-assessment. All this is done with the aim of ensuring safe, pollution-free navigation and high operational performance.

Marine insurance burst onto the scene of this complex industry about two decades ago. Since then, it has reduced the number and impact of oil spills from ships and transformed the way the industry conducts maritime operations around the world. What was initially a manual discipline has in fact always embraced technology; from paper checklists and checkboxes, to spreadsheets and digital record keeping.

Now that technology has continued to advance and new sources of more accurate data have become more accessible, we can take another leap forward. By combining new sources of data, increasingly available in real time, with the latest practices in data science, analytical platforms and predictive modeling, international maritime transport is equipped with solutions for monitoring and robust assurances that help strengthen safety, sustainability and regulatory compliance guaranteeing the performance of maritime operations.

MARITIME SAFETY AND ENVIRONMENTAL PERFORMANCE

Marine insurance is often an unsung hero of maritime safety and environmental performance. It is a critical discipline for the company, thanks to its ability to support the continuous improvement of maritime safety and environmental protection. Additionally, the systems and processes that were pioneered in tanker shipping are now applicable to a wide range of shipping and energy segments, covering everything from terminal operations to bulk carriers, oil and gas offshore to wind farms.

As the understanding of risk in the marine industry grows, marine insurance systems must also grow in sophistication, not only to remain fit for purpose, but to constantly improve safety and operational standards.

Those who do not take the right steps will be exposed to greater risks if marine insurance is put on the back burner. Apart from the crippling human and environmental consequences of a serious safety or environmental incident, the costs can also be measured in terms of extended downtime, legal fees, reputational damage, insurance costs, loss of investor support, etc. The extent of these risks can be summed up in the well-known concept of PEARL; People, environment, assets, reputation and liability.

The sea change between what is needed and what is now possible is reflected in the development of the OCIMF SIRE 2.0 inspection regime. This will greatly increase the depth and quality of data collected for marine assurance purposes during ship inspections. The system is due to be launched in the second quarter of this year, and it will be a key element in taking a more risk-based approach to assessing the quality of a ship, the safety management system and its crew.

It is also crucial to remember that the quality of data depends on the ability of people to interpret it. This reinforces the reason why marine insurance information needs to be easily understood and manageable, and married in the right hands to guide organizations through these changes and to make the best decisions possible.

As an OCIMF technology provider, MIS Marine has developed advanced marine insurance solutions and provides hands-on assistance to our customers. By combining technical, engineering and data science expertise, we are at the forefront of guiding and empowering the industry through these changes. We will also play a leading role in supporting the transition to SIRE 2.0, advising on the most appropriate response based on each organization’s needs and advocating for the benefits for those adopting this new regime.

Marine insurance can play a key role in the evolution of maritime transport towards ever higher safety, environmental and operational standards. By raising awareness and changing mindsets towards marine insurance, while reaping the benefits of digitalization and working collaboratively, we can enhance maritime safety, strengthen regulatory compliance, protect the marine environment and ensure reliable operations. and durable.


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