Message from the President: Roll on 2021

As I sit here on a cold autumn morning in early November penning the final President’s message of 2020 for the excellent IUMI Eye publication, the world is in some degree of turmoil. Europe is mostly in lockdown, with many parts of the continent under curfew conditions, the consequence of a vigorous second wave of the COVID-19 virus. The pandemic has wreaked havoc with people’s lives and livelihoods. Healthcare systems have been placed under acute pressure. Governments around the globe are raising public debt levels (even further) to get their nations through the worst of the crisis. This comes on top of ongoing international geopolitical tensions, and political instabilities in many countries.

We often hear media commentators describe that what the corporate sector seeks for normal business operations is a sense of stability. Understandably, there has been little of that in evidence this year. Business is not ‘normal’. And quite apart from the economic impact on its client base, the wider general insurance sector has borne its own scars with the heavy impact of COVID-19 claims in some non-marine products and through investment losses.

By contrast, whilst there have been pockets of heightened claims activity in the marine insurance sector (for example, with Loss of Hire - business interruption - claims on ships), casualty situations have tended to be an indirect consequence of the pandemic. It is likely that we will look back and say that the main impact of COVID-19 on the marine insurance sector was a reduction in cargo volume, leading (all other things being equal) to a reduced premium base.

This aside, my contention would be that the pandemic has mostly sped up trends that were already starting to emerge in the marine insurance sector, rather than creating new ones:

  • Temporarily, at least, markets like London have been forced to abandon face-to-face negotiation and adopt on-line trading and servicing.
  • The deployment of digitalised software has increased in speed.
  • The pressure to turn around unperforming marine portfolios has become more acute.

I often remind audiences that what marine insurance is there to do is to underpin and support trade. That is why we exist: we enable trade to happen. It is a testament to the resilience of our industry that despite all the chaos that has been heaped upon the world in 2020, we have continued to discharge this purpose to a high standard. The industry has continued to operate well and we have continued to support our clients.

IUMI itself has had to adapt too. Our Secretariat worked from home for long parts of 2020. Travel became virtually impossible. We were faced with the cancellations of our Spring conference in Hamburg and our Asia Forum in Kuala Lumpur. And yet, we also found time to innovate, the highlight being the hugely successful ‘virtual Stockholm’ conference in September.

Looking ahead to 2021

Against this backdrop, making predictions for 2021 is problematic, to put it mildly. Yet I think we can point to a few themes that will continue to be important influencers of the future as we wave farewell (and probably good riddance) to 2020 and look ahead to a new year. And we can also take note of what IUMI is doing to help its members with these challenges and opportunities:

Data and Digitalisation – The pace of change will continue to build, especially if the pandemic continues to force home based working. IUMI’s Data and Digitalisation Forum will continue to act as a forum for debate and discussion of the emerging technologies and software.

COVID 19 - In 2021, we will get to understand more clearly what the impact of COVID 19 has been on the marine insurance sector’s premium base. Watch out for the report by the IUMI Facts & Figures Committee report in September.

Sustainability and the Environment – However long the pandemic is with us, the real long-term emergency concerns climate change and biodiversity. Marine insurers will be affected by heightened claims caused by climate change, there will be ongoing changes to the nature of the assets that we insure (let’s not forget the introduction of low sulphur fuel on ships in 2020) and the clients and industries we protect will evolve: some sectors will grow and some will shrink in the future. IUMI formed a Sustainability and Environmental strategy in 2020 as one of our key priorities and we will be further evolving our dialogue and ideas in 2021.

Operational - In the short term at least, traditional travel and office-based activity will continue to be challenged. As it did in 2020, IUMI will continue to adapt to changing circumstances and innovate where appropriate. Expect to see more webinars and podcasts in 2021 and continued use of our GoToMeeting online tool!

The closing of one year and the arrival of a new one is always a traditional moment to reflect on where we are as people, as communities, as organisations and as businesses. At the turn of 2020, the overwhelming sentiment must be that we wish for the arrival of an effective suite of vaccines and a speedy end to the pandemic.

In the meantime, I wish you good health and happiness for the coming year wherever you are in the world.