Future of the Nordics

Where are we heading to?

Heikki Vaara, Claims Director at leading Nordic claims and survey company Wesmans, has been an independent claims service provider to the marine insurance industry for more than four decades. In this role he has had the opportunity to closely follow market developments from a claims perspective in the region. Heikki shares his expert views on this important market and stresses that these are his own personal views do not always necessarily reflect those of her valued employer

Over the years the changes have been big in both marine and cargo portfolios. I have no reason to believe that the years ahead would be any different. There will be mergers and acquisitions. Insurers’ risk appetites and brokers’ focus areas will be volatile. In the Nordics we have a healthy and growing captive market – large entities with appetite to retain a reasonable risk. From a claims service provider’s perspective this is obviously an opportunity. Whilst the traditional insurers do from time to time outsource carefully selected claims related services – typically surveys and in some cases claims management – the captives are more prone to use us as their partners.

F RES H W I N D S

One thing that will, I believe, develop going forward is expansion of MGAs in our market. We have seen MGAs grow. This is most welcome and it will balance the existing ‘local company market’ going forward. The Nordic market has traditionally been very local with insurers having capacity and capability to underwrite risks 100%. This is how it’s been for more than a century so it cannot be all wrong, However, fresh winds are not always bad.

By consuming typically up to 80% of total premiums, the claims process dominates the insurance industry’s operations in a way that has few parallels in other types of business.

Globally operating independent loss adjusters have existed in the Nordics only since late 1980s. Many of these companies currently operating here have their roots in marine claims. They were typically Lloyd’s/ILU agents that then expanded their service portfolios to non-marine losses. Their marine expertise in the region has since been diluted to some extent and this has in turn opened doors for smaller operators to exist and grow. Beside the insurers’ in-house claims services there are a number of small survey companies along the long coastlines of Norway, Denmark, Sweden and Finland. Many of these companies have very competent staff but, in the current rather strictly regulated business environment dominated by GDPR, sanction checks, compliance requirement, proper PI insurance cover and the like - these professionals are finding it more and more challenging to provide services. Those service providers that can provide– in claims

“By consuming typically up to 80% of total premiums, the claims process dominates the insurance industry’s operations in a way that has few parallels in other types of business.”

Heikki Vaara, Wesmans

management or surveys or both - the expertise and credibility and also comply with ever-increasing regulatory requirements are the ones who will be the frontrunners in this niche market.

TOOLS FOR THE TRADE

A focus on claims management services also means a greater need to develop tools for this trade. It has proved to be challenging for locally operating service providers to develop and especially maintain such tools. Larger claims management companies will be able to do this but they are facing the challenge of adapting the tools for the clients’ needs in each region. Being able to adapt and scale the tools continues to be a key to success as it will link the client and service provider tightly together.

Insurers and also claim service providers are capturing data. The ability to use it in a productive way will be one of the key elements in developing the business going forward. This is inevitable – it also means that data protection and the way data can be used will have to be clearly defined in procurement contracts.

One area that has received only very limited attention is human resources. Marine and transportation related claims work is typically international, very volatile, requires multiple skills – not least language skills – and challenges vary from day to day considerably.

Those who are able to attract and motivate individuals with the right attitude, not necessarily education, will be the forerunners in the future.

Experienced people are always sought after as they are the ones who have competence and do give credibility to the operation. However, retired and semi-retired people seldom have the passion to develop the business. Many of the existing service providers within the region are facing this problem, either knowingly or not.

HR PERSPECTIVE

From a HR and finance perspective the volume of marine claims business transacted today in the Nordic region could be streamlined. We are known to be expensive and the main expense here, as in any other service sector, is personnel. Staff costs are typically north of 55% of revenue and this means that focus must be kept on billable hours to safeguard business continuity. In my opinion it is clear that the market will change. New stakeholders will enter and exit. At the same time the claims need to be adjusted and surveys carried out.

Those buying these services will be increasingly cost conscious and new tools of the trade will be developed and introduced for the sake of efficiency.

Those of us who started their careers in this business back in the time before electric typewriters/telefax, have experienced enormous changes in both communication, but, also in reporting and monetary transaction.

There is no question that more and more claims will be handled based on streamlining the way claims data is processed. However, I do not see that this would take away the human professional touch as claims are often complex. Experienced claims adjusters with right skillsets are the ones who can protect their principals’ interest.

24 March 2023

www.marineinsurancelondon.com

Friday 24 March 2023 All times are in Greenwich Mean Time (GMT)

07:50 - 9:00 : Registration and Coffee in the Pre-Function Area

08.05-08.55: BREAKFAST BRIEFING: Time to Come Together – The Future of P&I?

Moderator: Demian Smith, Managing Director, Head of Mutual, Agency and Captive Reinsurance Solutions Global Marine and Energy, Guy Carpenter Panellists: Ed Davies, Chief Strategy Officer, North Standard Andrew Cutler, Chief Executive Officer Britannia P&I Club and Chairman of International Group of P&I Clubs, Christian-Pritchard Davies, Chief Financial Officer, GARD

09.00-09.45: PANEL DISCUSSION: Can London Still Call Itself the Marine Market Leader?

Panellists: Louise Nevill, Chief Executive Officer, Marine and Cargo, Marsh, Tom Midtunn, Head of Production Global Marine, Lockton Marine

09.45-10.15: KEYNOTE ADDRESS: The World – A More Uncertain Place Than Ever

Presenter: Richard Luckyn-Malone, Director, Herminius

10.15-10.45: FIRESIDE CHAT: War Insurance – How Well is it Working?

Participants: Frédéric Denèfle, President, International Union of Marine Insurers, Michael Davey, Barrister (KC,) Quadrant Chambers

10.45-11.15: COFFEE AND NETWORKING

11.15-11.35: KEYNOTE PRESENTATION: Time to go Nuclear?

Presenter: Mikal Boe, Chief Executive Officer, Core Power

11.35-12.10: PANEL DISCUSSION: Embracing the Poseidon Principles

Panellists: Nick Shaw, Chief Executive Officer, International Group of P&I Clubs, Pauline Des Vallieres, Sustainable Insurance Manager, SCOR, Hildegunn Nilssen, Communications Director, Norwegian Hull Club 12.30-13.20: LUNCH

13.20-13.50: ONE TO ONE: Information is King! Or is it?

Presenter: Astrid Seltmann, Analyst/Actuary of Cefor, The Nordic Association of Marine Insurers

13.50-14.15: PRESENTATION: Impact of Geopolitics on Cargo

Presenter: Neil Atkinson, Head of Marine, CNA Hardy

14.15-14.45: PRESENTATION: Capping the Costs

14:45-15:00: COFFEE AND NETWORKING

15.00-15.20: PRESENTATION: Operating in the Dark?

15.20-16.00: PANEL DISCUSSION: Collaborating with the Salvors

Panellists: Melis Otmar, Claims Director, BMS Harris & Dixon Marine, Caglar Coskunsu, Partner, Cavus & Coskunsu Law Firm, Andreas Brachel, Head of Environmental Claims, GARD, Wilco Alberda, Commercial and Claims Manager, SMIT Salvage

16.00-16.20: PRESENTATION: Keeping the (Claims) Records Straight

16.20-17.00: WORKSTREAM REPORT: What Will it Take to Make LOF Future-Fit?

Participants: Jenna Hales, Marine, Energy and Specialty Claims Manager, Hiscox, James Herbert, Secretary General, International Salvage Union, Stephen Chapman, Marine Claims Manager, Ascot, Ben Harris, Head of Claims London Branch, The Shipowners Club

12.10-12.30: PRESENTATION: New Year, New Rules