AAIS has been a longtime supporter of the Inland Marine Underwriters Association (IMUA). The national association provides exemplary curriculum, training, and resources to strengthen underwriting in inland marine insurance. Every year, the IMUA holds an annual meeting to provide educational opportunities for professionals of all inland marine backgrounds.
The IMUA’s 90th Annual Meeting was planned for May 17-19 at the Hyatt Regency Scottsdale in Scottsdale, Arizona. Due to COVID-19, however, the event was postponed. The event was scheduled to have an abundance of learning opportunities, with session topics including delayed builder’s risk claims, motor truck cargo, warehouse legal liability, commercial floods, and the impacts of cyber and climate change on the Inland Marine industry. The meeting, as well as IMUA’s overall contributions, have helped to improve an already booming industry.
While unable to attend the 90th Annual Meeting, AAIS was graced with insight from IMUA CEO Kevin O’Brien and Rich Soja, Global Head of Inland Marine at Allianz Global Corporate & Specialty. In a discussion with AAIS President and CEO Ed Kelly, the inland marine leaders provided professional insight into the inland marine market’s current trends future– pre-COVID-19.
The Inland Marine industry has traditionally been 10% more profitable than the P&C Industry. This continued economic success can be attributed to the growing economic influence of two inland marine fields: construction and transportation. Inland Marine programs typically provide coverage to trucks and trains transporting commodities. Programs also offer builder’s risk coverage for renovations, redevelopments, and new construction projects popping up across the country.
Trends
While making a great profit, recent trends have shown challenges in the industries.
According to Soja, the transportation industry is currently seeing a growing trend in freight market slowdown. Increasing from the end of 2018, the Industry saw 750 motor charters close in 2019. This has resulted in scrutiny of the financial quality of underwriting. As for the construction industry, Soja describes a shortage of skilled labor, which has resulted in increases in demand and, thus, cost.
As for insurance trends, Soja points out that many large insurance companies struggle to use legacy systems and incorporate new data into underwriting in a timely fashion. Companies have found that emerging MGAs and insurance providers are of excellent service to this issue. Soja also identifies the ‘dirty word’ of underwriting, “frames” as a challenge, for there is an increase in frame construction requiring builder’s risk. Frames become a challenge to underwriters because of their vulnerability to fires, water damage, and other perils.
Staying Current
As time evolves, its important companies do too. According to O’Brien, IMUA is devoted to providing professional development and education to members of the industry. To stay current, IMUA addresses two components: veterans and the younger workforce/millennials. O’Brien describes the recruitment and educating of newer, younger, underwriters as a challenge.
To combat this issue, IMUA is focusing on launching introductory programs, to catch new professionals up to speed on Inland Marine. The company is also providing its veteran professionals with more complex educational opportunities, such as a builder’s risk course that focuses on renovation and redevelopment projects.
Through the challenges and new trends, O’Brien and Soja are confident in the Inland Marine industry, projecting growth in construction and continued profitability.