Human touch key to large claims

Commercial Risk Europe talks to Oliver Hutchings, global head of marine and chief operating officer for aviation at Charles Taylor Adjusting, about about loss adjusting and risk management trends.

According to Hutchings, one of the biggest risks faced by the general insurance industry in the Netherlands, and elsewhere, is a lack of succession planning. “At Charles Taylor, we are investing a lot in our teams’ recruitment, training and development. Yet attracting and retaining talent is an ongoing challenge and the insurance industry could do a lot more to address this,” he says.

The marine industry in particular has been subject to increasing regulation and more stringent compliance obligations that have exacerbated the situation further, says Hutchings. “More regulation requires more expertise. As ships become more technical, the claims become more complex. In addition, container ships are becoming much larger. So while the number of claims may have reduced, the size and complexity of those claims has increased.”

This trend was exemplified by the infamous Evergreen incident that saw one of the largest container ships ever built run aground in the Suez Canal back in March 2021, blocking the waterway for six days and making a severe dent in global trade.

The incident highlighted the risks involved with large container ships operating in tight areas as well as concentration risks in the global supply chain – issues that require experience and expertise when a major claim or a loss event occurs, further exacerbating the skills shortage.

“The expertise is there now but many of those people have been in the business for a long time already,” says Hutchings. “While we have a number of experienced people at a less senior level, there is a 20-years gap that needs to be addressed.”

The challenge has been made even greater by the economic difficulties facing companies, says Hutchings. “There is always a pressure on costs. We see that in the goods and transportation sector, and that has a knock-on effect on service providers. Everyone will agree that investing in good people is key. Yet finding enough money in the system to train the next generation is an ongoing battle.”

Typically, technology is often seen as the answer to labour shortages and skills shortages. Remote working was a vital resource during Covid but it has its limitations in the loss-adjusting world. “Speaking to a ship’s crew on Facetime or Zoom to find the cause of a loss can cause errors. So much is lost when you are not face to face. While some parts of the market have changed and become more digital, the loss-adjusting world still benefits from having a physical presence. Technology certainly does have a part to play, especially for small liability claims. Yet, when you are dealing with more complex claims, like we are at Charles Taylor, nothing beats human involvement,” says Hutchings.

The impact of cyber

Another risk impacting the Netherlands’ marine sector is cyber, says Hutchings. When it comes to major ports, such as Rotterdam, there is a much greater use of technology and internet connectivity, which brings greater efficiency but also new types of risk. “There used to be people-operated cranes, which are now fully automated and even fully autonomous ships on some small test routes,” says Hutchings.

Cyber risks are, however, more limited when at sea. “Ships are one of those things that are not as connected because of proximity drawbacks. There are satellite links but this can be costly out at sea,” sayd Hutchings. Consequently, the marine sector has not been subject to the same cyber risks as other sectors.

Disciplined underwriting

Thankfully, capacity does seem to be good at the moment in the Netherlands’ marine market. The improved landscape is partly a result of improved underwriting discipline, as well as a relatively benign claims environment, says Hutchings.

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