The invaluable role of the IUA MTC in marine insurance
Markel International marine director Dan McCarthy explains how the International Underwriting Association (IUA) and its Maritime Technical Committee (MTC) have led the charge in supporting marine insurers with emerging and geopolitical risks, while bringing more representation to underwriters through lobbying activities with NGOs.
From the ongoing ripple effect of Covid-19 to the vast war-induced trade disruptions, the last five years have seen marine insurers riding economic and geopolitical waves. And as the industry sets sail for 2024, geopolitical tensions are showing no signs of slowing down. One organisation that has its finger on the pulse of marine risks is the IUA, which has a longstanding tradition of serving the marine market, dating back to 1884 through its predecessor business – the Institute of London Underwriters.
The IUA – and, more specifically, the MTC – represents the interests of all member companies writing marine business by leading technical discussions on emerging risks and legislative updates, as well as creating policy clauses and collaborating with NGOs to lobby for regulation changes impacting marine insurers.
McCarthy was appointed as IUA MTC chairman in 2021, and has since been instrumental in bringing emerging and geopolitical risks to the fore for members whilst fostering relationships with shipping organisations.
Educating the market on emerging and geopolitical risks
Some of McCarthy’s efforts on industry engagement have included organising guest speakers from the likes of S&P Global, Herminius, BIMCO and the International Association of Classification Societies to come in and talk with IUA MTC members. These discussions have explored technical issues facing the shipping sector (e.g. cybersecurity, autonomous vessels and the transition to decarbonisation) and war risks (e.g. Russia-Ukraine), providing insights into how those conflicts are affecting their insureds from an operational, safety and liability standpoint, while empowering individuals by ensuring they have a voice at the table.
“We’re always encouraging MTC members to address important issues, rather than having our internal meetings focused on one person or theme,” McCarthy says. “The committee meets six times a year and all those meetings are structured and contain meeting packs that have been driven by members around the table. These packs include briefing notes on technical underwriting issues, the IUA’s representational work, emerging maritime risks, legal developments and policy clause updates – all of which are available on the IUA website,” he adds.
Collaborating with industry bodies to achieve results
A number of topics are front of mind, notes IUA secretary Chris Jones, from the ongoing challenges around EU sanctions and cyber risk, to civil unrest in Sudan and West African piracy, to name a few. The committee, however, has been hard at work disseminating vital information to members on those matters – garnered from its ongoing engagements with security agencies on behalf of the hull/war and cargo markets, in conjunction with the Lloyd’s Market Association (LMA).
Jones says that this information has enabled marine insurers to be better appraised of security developments in real time, but he admits more work needs to be done to explain the impact of geopolitics on the sector.
“For example, in international sanctions, the IUA is increasing its engagement with regulators such as the Office of Financial Sanctions Implementation, Office of Foreign Assets Control and the EU, to not only put the position of insurers across, but also help educate them on the impact of sanctions on insurers and the wider shipping sector.”
Another important aspect of the MTC’s work is its engagement and collaboration with other industry bodies. In addition to its engagements with the LMA in populating the MTC’s joint underwriting committees – hull, cargo, war, liability, specie, natural resources and excess of loss – the IUA is a member of Maritime London and the International Union of Marine Insurance, both of which have established lobbying functions with national governments, the EU and the International Maritime Organization. The MTC provides the technical input into the IUA’s lobbying within these bodies, Jones notes.
The MTC comprises around 30 insurers – made up of senior marine heads and senior underwriter practitioners, while the IUA contains 74 organisations. According to Jones, the IUA has seen an increase in memberships and representation during McCarthy’s tenure as MTC chair.
“In recent years, we have ‘upped our game’ by going directly to the major players and utilising Dan’s networks in the London and Lloyd’s markets to highlight the invaluable work the IUA is carrying out on behalf of the underwriting profession,” he explains. “As a result of our efforts and commitment to marine, we are seeing more engagement and recognition among our external stakeholders.”
An example, Jones points to the association’s engagement with Oceana to address illegal, unreported and unregulated fishing, for which new risk management measures are now available including an underwriting checklist and vessel-checking tool.
Elaborating on Jones’ statement, McCarthy said: “The IUA has increased in popularity over the past five years, as we are seeing more insurers writing on the IUA stamp. The MTC, in particular, has become more prominent, driven in part by the projects we have conducted, which has resulted in an enhanced market profile,” he asserts.
Attracting talent into the market
Looking ahead, Jones and McCarthy are aiming to develop some new initiatives/projects to bring fresh talent into the IUA and its MTC meetings. Although the talent gap has been an industry bugbear for many years, the duo has made some good progress in this area, notably through the IUA’s partnership with Chiltern Maritime Ltd to sponsor a maritime cadet.
Jones elaborated: “The Chiltern Maritime has a selection process for cadets who are looking to get a sponsorship, so they can complete their degree/qualification before going off to work in the marine industry.
“As part of the programme, the IUA funds one cadet per year. Cadets have come to a committee meeting before to see what we’re doing, and we would like to get more of them in to talk to our members moving forward.”
He adds: “This is unique to us as other associations in the London Market are not doing this.”
From an underwriting perspective, the IUA is looking to bring more junior underwriters into its marine activities, in addition to its existing under 35’s representation at the MTC, by selling the advantages of being involved in the activities of an association such as the IUA. For McCarthy, there were a multitude of reasons why he became a member and why others should follow his lead: “I officially joined the MTC in 2016 because I heard that one of my ex-colleagues was already a member and a previous IUA MTC chairman, so there was a legacy element there. When I originally joined, however, I had ambitions in my underwriting role at the time to go cross-class and so the IUA was the perfect organisation to learn about the other classes that weren’t my every day.”
McCarthy continues: “For members in their own careers it gives them good exposure and development opportunities because you will be involved in building and managing stakeholder relationships, while playing a key role in shaping the marine market for the better.”
With McCarthy’s tenure coming to an end this year, he says he will still be very much an active member of the MTC and will continue working closely with the committee and the IUA to navigate the ever-evolving marine risk landscape.
For more information on joining the IUA, visit: www.iua.co.uk/services and for further details on the MTC, go to: https://shorturl.at/dmFHL