Marine insurers navigate green tech blind spots as cyber threats surge

Speaking at the International Bulk Shipping Conference, Willis Towers Watson head of shipowners Simon Lockwood cited recent claims evidence that points to systemic vulnerabilities in alternative fuel adoption. He outlined a dual-fuel vessel incident exceeding US$1.2M in additional operational costs when engine manufacturers proved unable to supply critical components.

"The real issue is the data just doesn’t exist," Mr Lockwood stated, regarding methanol dual-fuel coverage, highlighting how initial enthusiasm for new technologies can mask operational risks. He drew parallels with historical Azipod propulsion challenges, where early adoption led to significant industry losses.

Addressing innovative insurance structures, Mr Lockwood rejected event-triggered parametric insurance for emerging technologies such as rotor blades, explaining traditional hull and machinery coverage remains "relatively inexpensive." Unlike Caribbean windstorm insurance, where predictable annual events make parametric solutions viable, shipping’s green technologies lack sufficient industrywide data for trigger-based policies.

In response to escalating cyber threats, WTW launched CyNAV, offering comprehensive cyber coverage including vessel damage, loss of hire revenue, detainment and third-party IT service provider interruption. The product addresses October data, revealing widespread vessel spoofing in specific geographical hotspots.

Spotlighting cyber risks, he revealed insurers are "paranoid about not just doing the right thing, but actually being judged for not being good enough." A recent incident where spoofed data erroneously suggested Iranian cargo origins exemplified emerging compliance verification challenges.

Mr Lockwood emphasised the critical need for bilateral knowledge exchange between insurers and operators. "This is a two-way thing," he stressed, calling for enhanced data sharing to support informed risk assessment of novel technologies.