Product Family

The COVID-19 pandemic has hit many industry sectors hard, necessitating changes in the way they operate and altering the risks they face. In the marine industry, the restrictions on the movement of people and goods meant that many vessels were withdrawn from service and laid up in ports around the world.

For marine underwriters, this added to the already often complex task of keeping  track of where vessels, cargo and other assets were at any one time. 

Tackling the accumulation challenge amid COVID-19
The accumulation challenge has always been a thorny one for the marine insurance industry, but it was exacerbated by the acute nature of the COVID-19 pandemic and steps taken to try to stem the virus’ spread.

Cruises are big business and were, until recently, the fastest growing sector of the travel industry. In the past five years alone, the demand for cruises increased by 20.5% and in 2018, the global cruise industry was worth an estimated $150 billion. 

But in the first quarter of 2020, the largest COVID-19 outbreak outside of mainland China occurred on a cruise ship. In the aftermath, most cruise ships around the world were temporarily withdrawn from service and laid-up in ports, creating accumulations of high-value assets that are susceptible to a single loss event.

For example, a single hurricane affecting a port where several vessels are stationed could potentially result in hundreds of millions of euros in damage. 

Underwriters and risk engineers use vessel location information to aid their understanding of risk, but the process of analysing and aggregating that data was often time consuming and costly.

Our underwriting team recognised that they and our risk consultants needed a way to determine the exposures and risk profiles associated with assets around the world in near real-time.

To meet this challenge and solve the problem, AXA XL’s London and Singapore-based marine team and our Singapore-based Marine Risk Consulting team collaborated with AXA REV – which carries out research on the relationships between humans, machine learning and artificial intelligence. 

They created an application that visualises the position of AXA XL’s insured vessels on a map by calling an external application programming interface that provides the most recent longitude and latitude information of a given vessel based on its last Automatic Identification System transmission. 

The location information is then supplemented by information about the vessel’s insured value and maritime weather information such as swell height, wind speed and barometric pressure.

The information can be accessed by multiple users simultaneously and gives a comprehensive – and instant – view of exposure. 

The application can also send automated email accumulation alerts to underwriters based on predefined business rules and machine learning algorithms.

Trading Limits and Warzones - taking control of portfolio management
As well as the accumulation of vessels and assets in ports, another important dimension of marine portfolio management is monitoring ships entering and exiting war and piracy-prone areas, and sanction and trading limit zones.

When vessels enter these areas without prior notification, underwriter approval or the payment of additional premiums, policy coverage is suspended for the period of the breach. 

Until now, underwriters typically had relied upon brokers to report these breaches. But the new application alerts underwriters when vessels enter these zones, enabling underwriters to more proactively monitor the risk.  

The future
The ambitions of this initiative go beyond monitoring accumulation risks and vessel activities in high risk /restricted areas. 

We hope that once the application has been in use for a while it will be possible to collect enough vessel activity to create dynamic and behaviour- based risk segmentation and to supplement pricing models for marine insurance.

This should lead not only to premiums more accurately reflecting the underlying risk, but also to us being able to share better risk information with clients to help them control insurance spend and minimise the incidence of losses. 

Another benefit should be an ongoing dialogue with clients about risk factors over the term of the policy, rather than the traditional once a year renewal discussion. 

In addition, the vessel activity data that is collected can be used to facilitate the claims investigation process, enabling claims managers to reconstruct the historical trajectory of the vessel to get a better picture of a loss event.

While the COVID-19 pandemic was a definite catalyst for the need to better manage risk accumulation, this new solution and the data it provides will help our underwriters to better understand, select and price risk going forward in this fast-changing environment.

Mike is a Fellow of the Institute of Chartered Shipbrokers and a Chartered Insurer and has 35 years in the Marine insurance sector working in claims originally and moving over to Underwriting 10 years ago. He is currently the Global Head of Hull, based in London. He is a member of the Joint Hull and Joint War Committees at Lloyd's and a member of the European Committee for the Korean Register of Shipping. He can be reached at 

Sundeep is a former seafarer and Master Mariner. He is currently the Head of Marine for Asia Pacific based in Singapore. He is also a serving committee member of the IUMI Cargo committee. He can be reached at

Jarek Klimczak is a former seafarer and Master Mariner. Nowadays he is a Marine Risk Engineer based in Singapore supporting a broad range of transportation clients, over the sea and inland. He can be reached at

To know more about AXA REV, please click here.


More Articles

Global Asset Protection Services, LLC, and its affiliates (“AXA XL Risk Consulting”) provides risk assessment reports and other loss prevention services, as requested. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. AXA XL Risk. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any publication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, AXA XL Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with this publication, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.

US- and Canada-Issued Insurance Policies

In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, coverages are underwritten by XL Specialty Insurance Company - Canadian Branch and AXA Insurance Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
US domiciled insurance policies can be written by the following AXA XL surplus lines insurers: XL Catlin Insurance Company UK Limited, Syndicates managed by Catlin Underwriting Agencies Limited and Indian Harbor Insurance Company. Enquires from US residents should be directed to a local insurance agent or broker permitted to write business in the relevant state.