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27 September 2021
Cargo risk underwriters will need to draw on predictive analysis as supply chains are transformed following impacts from the COVID-19 pandemic, an International Union of Marine Insurance (IUMI) event has heard.
“Raw data on cargoes, movements, weather, casualties and from a range of IoT sensors will be gathered to highlight patterns and correlations,” IUMI Data and Digitalisation Forum Chairman Patrizia Kern-Ferretti told a workshop delivered as part of the annual conference.
“Combining this with predictive machine learning models will allow underwriters to much better understand the likely frequency and severity of potential losses and claims; and allow them to apply accurate exposure rankings.”
The result will be enhanced and more suitable insurance products, more accurate pricing, more leverage for prevention and, a more disciplined cargo insurance market, she says.
Barriers currently include a lack of data standards across the supply chain, the problem of data protection and ownership and the willingness to share information and collaborate.
Ms Kern-Ferretti says prior to the pandemic most global supply chains focussed on maintaining the lowest cost base possible that allowed goods to flow.
“COVID has exposed this as unsustainable,” she said. “Today, we are in a much better position to understand and recognise that low cost has translated into low reliability.”
IUMI Loss Prevention Committee Chairman Pascal Dubois also highlighted the importance of technology in creating a “virtuous circle” of efficiencies, better service and improved profitability.
“Leveraging new technologies and solutions including online audits, inspections and remote surveys which create efficiencies and lower costs in applying loss prevention measures will improve this virtuous circle of loss prevention further,” he said.