The digitalization of the marine industry and the future of risk
In today’s business landscape, more and more industries are being reshaped by digitalization, which has already had major disruptive effects on value chains and business models. Leading companies in many sectors, such as the car industry, have taken action to meet the challenges and opportunities of digital disruption – and the shipping industry should be no exception.
As an increasing number of vessels gain connectivity and roll out digital solutions, there are positive implications for risk in the maritime industry. Changes in operational efficiency, asset management, and commercial decision-making will simultaneously increase safety while reducing business risk. Digitalization also enables new data-driven business development opportunities that have implications for risk, such as maintenance monitoring, vessel performance monitoring, and intelligent insurance.
Reducing operational and compliance risk
The day-to-day operational complexity of running a fleet is high. The operator, captain, and crew must look at the vessel as a whole to find the most efficient combinations of all onboard variables such as speed curves, fuel consumption, and weather data.
Digitalization presents a myriad of opportunities when it comes to improving operational performance to reduce risk. For starters, better operational transparency via real-time data and insights translates into better operational safety. Automating of emissions monitoring with the help of digital means – which has become especially relevant with EU MRV regulation – also helps to ensure compliance.
The move to proactive asset management
Vessels require continual maintenance to ensure reliability and availability across the vessel lifecycle. Moving from time-based to predictive, condition-based maintenance requires much more than simply collecting data. The data needs to be filtered and analyzed in order to provide proper insight and the right balance between reliability and maintenance cost, all while ensuring on-board safety.
Digitalization provides the bridge to move from time-based to truly predictive and condition-based fleet maintenance. Benefits include reduced maintenance costs and improved asset efficiency by way of automated data and reporting. Furthermore, asset reliability and risk management can be improved with the help of predictive insights provided by modern analytic tools. In other words, digital solutions will help prevent breakdowns and unsafe situations before they happen.
Intelligent maritime insurance via digitalization
Maritime insurance models are typically based on a combination of demographic and static ratings such us size, age, flag, class, type, and ownership information. However, a key ingredient that has been missing from maritime insurance is real-time operational data, especially accurate and “always-on” location data.
By enabling real-time data transfer and analysis, digitalization can facilitate a jump to intelligent insurance that is based on actual vessel performance. Both insurers and owners can view this as a win-win arrangement. Accurate, real-time operational data can be used to provide a transparent and shared view of risk as well as enabling a tailored insurance cover that allows customers to pay for only what they need.
Ideally, any digital solution for capturing real-time location data from ships for the purpose of insurance would require no investment from ship owners or operators and only minimal effort to install so as to lower the barriers for entry.
As an added incentive, owners and operators could also get access to real-time performance data, allowing them to kickstart their own journey towards digitalization. Such data would include location but also key factors such as speed over ground, speed through water, estimated time of arrival, charter party compliance, and so on. This data enables optimization initiatives to further reduce risks related to operations, asset management, and commercial management as described above.
Taking the first step
To bring more intelligent insurance to the shipping industry, Eniram has partnered with marine software provider Concirrus. Concirrus’ software, Quest Marine, ingests and analyses historical and real-time marine data sets, such as weather and port data and vessel movements to provide actionable insights to marine operators and insurers. The partnership will see Quest Marine leverage real-time location data supplied by Eniram’s Skylight 3.0 performance monitoring service. The use of accurate, real-time operational data will be used to enable better visibility while lowering insurance risk.
According to Andrew Yeoman, CEO of Concirrus, “The combination of Concirrus and Eniram technologies helps both fleet operators and marine insurers improve the reliability of vessels, and lowers the costs of operation. For fleet operators, Eniram technology facilitates safe, efficient operation and has the added benefit of lowering risk. Insurers can now offer innovative, connected policies that reflect the needs of their customers and reward these safe operations. For insurers this means that the market now has a new segment of lower risk, responsible operators who can be incentivized with innovative insurance products.”