Latest / Ben Taylor Podcast / Marcel Herrera | Coast Insurance
Transcript
- This episode was talking about insurance, specifically Coast Insurance, and a bit about, uh, compare yacht insurance here with Marcel.So Marcel, what did we talk about?Yeah.We had a really good chance to dive into comparison websites, uh, how they support the customers and support the insurers, but also Coast Insurance and the smart monitoring devices.Beyond that, we looked at, uh, you know, the, the, the history of insurance, where it's going in the future, and, you know, made some bets on what the future's gonna look like.It's a juicy one.It's quite nerdy, but it always is with insurance.Hello everybody, and welcome back to another Ben Taylor podcast.Today, we are on board a motoryacht, Sheer Gold, here at the Palmer International Boat Show.Thank you so much to Hill Robinson for p- providing the venue.We're being looked after.Thank you to them.They're awesome.That is amazing.And today, we're gonna focus on, uh, Coast Insurance, so we have Marcel here, uh, to talk all about it.Welcome to the podcast, Marcel.Good morning.Thank you for having me.No worries.No worries.So let's have some context first.Who are you?What do you do?Brilliant.Yeah.Uh, my name's Marcel.I'm, uh, the head underwriter at Coast Insurance.Now, Coast Insurance is a insurance provider in the Lloyd's of London market, uh, that works with brokers and clients directly to provide what we think is a future approach to yacht insurance.Um, so we've got some really exciting ways that we've changed our little industry, and, uh, yeah, we're very excited to tell people about that.Okay.And, and yacht insurance is reasonably broad.There's vessels like this.There's much smaller vessels.They vary, especially from an insurance perspective when you're looking at the risk, the liabilities, et cetera.What, what's your niche?What can you actually serve?What's unique about Coast?Yeah, absolutely.So, um, small boats and big boats, um, y- or yachts, they have very different risk profiles.Um, how they're used, where they go, how much they're worth.Those are real things that shape how an insurer looks at them and sees how they need to, uh, how, how they underwrite the risk.Now, for us, our sweet spot is the smaller end of the market.Um, and you know, that still goes up to your sort of £2.5 million or $3 million worth in value.Um, that's where we think we can have the biggest influence onto the market and try and make the biggest change.But, um, you know, the whole value chain goes upwards of, uh, you know, 750 1000000, um, in, in boat's value.So, um, you know, the real big super yachts are out there as well, and, uh, we, we have a proposition for everywhere across the market where we try and assist and, uh, you know, try and get a little bit more out of the client and insurer relationship.And I wanna go a little bit nerdy, but as- assessing the risk from an insurance perspective, how is that traditionally done?How is the legacy underwriting done, and how are you approaching it slightly differently?Yeah, absolutely.So the, probably the best way to look at this is if we rewind the clock back to, you know, um, 100 years ago, when, uh, when pleasure crafts and yachts, uh, were theFew and far in between.You know, not everyone had a boat, and you know, they're definitely becoming more popular these days.But back then, it was, uh, it was all perceived in a very different way to today.So data has come along and changed a lot, but back in those days, um, you would have underwriters, but predominantly sat in Lloyd's of London, um, who get presented a risk.Um, it could be, you know, a, a small pleasure craft or a slightly larger craft for a, you know, royalty ar- around, uh, around the world.And, uh, they would try and make an assessment of what they think the chances are that this boat is going to have, a small loss, a med- medium loss, or a large loss.And, uh, that's largely based on their sort of understanding of, you know, a number of boats that get presented to them throughout the year, uh, where they're manufactured and how they're used.And it's, uh, very, veryIt used to be very, very high level, and a lot would rely on an underwriter's expertise.You know, they might have been ex Merchant Navy or Royal Navy.Yeah.Um, and they would, they would look at these risks and try and apply their technical understanding and say like, "Right.This is where I think the premium needs to be for one boat," and then the whole fleet of boats that they insure in order to have enough money to pay for the claims that they perceive are gonna come out.Right.And the key, key bit there is they think that.Exactly.It's from their experience.It's a little bit ambiguous.It's like kind of a general feeling, probably a little bit relationship based and experience based.And then today, um, I imagine it's a lot more data focused.It's spotting trends and actually evaluating the risk much more quantita- quantitatively, rather than qualitatively and a little more like, "Oh, what certifications have you got?Where is the boat?Oh, right.Okay.Roughly about this premium should, should fit."Exactly, yeah.And so I think relationships are still a really important part of today's industry.Yeah, of course.But the one thing that's happened in the last, let's say, 10, 20 years, is, uh, the influence of data into our decision-making process.So you can start looking at risks and start, you know, analyzing portfolios based on certain manufacturers of vessels, certain flags of vessels, lengths of vessels, and how they're used.And you know, if you've got a large enough sample size of, you know, anything, I guess, from upwards of 100 boats or 1,000 boats, you can start drawing trends, and you can start seeing like, well, actually, these kind of boats attract owners that are more likely to have these kind of losses.And it becomes a, you know, a little bit of a gamification for underwriters, 'cause the more data you have and the more you can analyze and pivot it all together, um, the better your, uh, way of, you know, predicting what is going to happen.And you know, the history is an indication of what happens in the future.And I've got a keyword down here called dynamic underwriting.Is that what we're talking about here, where it's there's a couple variables, and quite quickly you can say, "Well, we're gonna use the boat for this activity"?And overnight, you can evaluate that risk and say, "Okay.Well, here's the risk.Here's the premium.Done," rather than it being quite rigid for, say, a 12-month period.Yeah, exactly.So, yeah.1, one really good example for sort of dynamic underwriting is, you know, on small boats, you could have it used as a pleasure only vessel or sometimes a skipper charter.You know, on small boats, that makes quite a big difference because whoever's chartering it might have different uses.Yeah.Once you get into the super yachts and the mega yachts, you know, a, uh, a skipper charter is very similar to, you know, the owner just using the boat.It's just different people on board enjoying it, like we are currently sat on, on, on the back of this lovely boat.Yeah.Um, the, those sort of elements don't make too much of a difference, data has shown us.But, uh, what it does allow is on the smaller boats where it does make a difference, someone comes and says, "Actually, I need to do some charters next week that I didn't plan on doing.Can you reevaluate the risk and, you know, let me know what the change in premium and the terms are?"And that, you know, that's-Now we're able to make those changes pretty much every night Yeah.And i- is thisI suppose it's a, a bigger scope for an insurer to actually be responsible for and really evaluate these.Uh, how are you doing that?So coming on board, more inspections, less inspections, remote monitoring, all that kind of stuff, is this all considered?Yeah, definitely.So the, the quantitative approach to underwriting is still there, but someLet's say the qualitative approach has sort of transitioned, like you said, to sort of surveys, inspections, and understanding a little bit more about some of the softer edges around the risk.Um, you know, pre-insurance surveys still exist.Um, insurers still want to see pre-purchase surveys and full outwater condition surveys on a lot of vessels, especially the older ones.Yeah.Um, you know, newer vessels tend to not need a survey.Um, but also, you know, for larger vessels, whether or not they're in class, that makes a very big difference and, you know, a lot of underwriters won't touch vessels that don't have a survey or are not in class.So do you end up, um, I'm trying not to say the, say the keyword that's just like classic jar- uh, jargon.But, like, and from a, a risk mitigation point of view, can you then say, "Actually, we advise the boat not to do this activity because of this risk, or perhaps consider other options, other itineraries, other geographies to go to as opposed to, say- Yeah, that's, that's-yeah sure, go ahead, but here's your premium" That's a really good question.We do have a lot of boats that get used in, you know, standard ways, you know, like med cruising, and then, um- Quite typical.Bit of time in the med, bit of time in the Caribbean, the right seasons.Exactly.That's most of the boats.Exactly.That's justOccasionally you get owners who, uh, you know, they wanna explore a little bit further, they wanna push the boundaries of what they're doing a little bit more.Yeah.And it could be, you know, spending more time on board a boat.But it could also be going to, you know, different cruising areas and seeing parts of the world that don't get seen very often.The Pacific's a great example.The Arctic's a great example, and the Antarctic's becoming really popular as well.And there's a, a principle, um, you know, in, in the modern world called, uh, you know, the, the tail wags the dog.In this instance, if the sh- insurance is prohibitive, um, it makes owners, you know, rethink about what they're going to do.You know, if you're looking to, you know, go down to the Antarctic, you might find that actually the premiums to be fully insured there mean that you don't want to do it if, uh, if you still wanna be insured.risk profiles are things for owners to consider about themselves as well, so some owners might choose to self-insure for those sort of activities.Right.Okay.And so there's, there's Coast Insurance.This is part of a, a bigger group that's compare your insurance so people can find the most appropriate insurance for them.But just from a commercial model point of view, what are the differences there?What are you kind of leaning on in terms of broker relationships and underwriting, I suppose, as many boats as you can and facilitating that?Yeah, absolutely.So, um, yeah, we're, we're really proud about what we've built over the years and, uh, back in 2017 we launched Compare Yacht Insurance, uh, which, uh, is our sort of, uh, copycat of the car and home insurance world, where you go online, you get a quote, you put your card details down, you have a policy, and you can do those things, you know, within minutes.Yeah.Um, we've been working with a lot of insurance providers, insurers, and MGAs in the market to that facility out there for small boat owners.Now, we're really realistic about the type of boats that will buy an insurance policy without speaking to someone.You know, a boat like this, you're gonna wanna speak to a broker and have an appointment.There's gonna be some kind of consultation.It's not check out quick- Exactlycheapest price done.Yeah, yeah.Yeah, yeah.There'd be some red flags that come up if that happened.But the small boat market, which, you know, it's still, it's up to sort of a million, um, pounds worth of value.There is- It's quite, it's quite a lot of, uh, of risk.But I s- I s- suppose from aLike, it would be weird to do, like, a, a car insurance with speaking to someone and doing some kind of inspection.Everyone's so used to this."Okay, well, here's, here's the data, here's- Yeahwhat you're actually insuring.Check out quick.Done."Yeah, yeah.Carry on.Yeah.It sounds great, but, you know- Yeahas an owner, you probably want a bit more comfort.Yeah.And as do our insurers.So we've got, um, over 15 insurers that we support on Compare Yacht Insurance.Okay.And each of those has their own little niches.Some might do certain value bands.Some might do different cruising areas.And one of those insurers is Coast Insurance.So we participate alongside everyone else, um, from a complete impartial point of view.You know, every insurer gets the chance to quote every client, and- YeahThis is my proposition."And- That, that's so fair.That's so fair.'Cause I mean, uh, it, it's cool because it's, uh, you've got that serve the client ultimately as best you can, but then also the insurance world's a little bit likeWell, they're all very friendly.Obviously, everyone wants to a- underwrite and have their, have their portfolio.Yes.But at the same time, because the risk is assessed and they have, like a wider portfolio of, of risk to accommodate for, actually you can sit alongside each other- Yeahand go, "Well, this yacht is appropriate for this portfolio, and that'll be a better price, it'll be better fit for the company, better underwriting.And a different boat would be more appropriate for a different one."So you can truly- Exactlyserve the cu- customer better.You'll get a bit of business out of it, everyone else will for the, the un- other underwriters.And happy customers, happy days.Exactly.And we love facilitating that, because it's all about being impartial, it's all about being independent, and we're a very small, tight-knit community in the insurance world.You know, every- Yeahbroker and every underwriter, we all know each other.Um, the idea that we can all serve the same clients and make it just a really easy process is, uh, is our sort of mandate.This is the way.Yeah.So you showed me q- quite a nice platform.I believe this is for, um, customers of yours who can see real live data to really just be really clear about what's going on in the world, and what's advised, what they're covered for.Can you just describe that platform a bit more- Yeahfor us?Very passionate about it.Uh, the way that I would sort of introduce it is, you know, in your home or in your life, you've got so many things that connect to you.You've got your watch connecting to your phone.You've got, you know, an app that allows you to control your heating or cooling at home.Yeah.Uh, your thermostats, you know, your front doorbell and cameras and lights.Everything's connected these days.And we've transitioned into, you know, a sort of place and time where not every boat is smart and connected.A lot of boats, um, you know, especially older ones, they haven't got full technology on board.Um, and you know, owners rely on them being in the marina, and, uh, and, you know, hopefully everything is well.Now, what we've done with Coast Insurance, which, uh, you know, is our unique proposition, is, uh, we provide every single one of our owners with a small smart monitoring device.It plugs straight onto the batteries on board.You know, a child could install it.It's relatively easy.Red onto red, black onto black, and then the device is live.It's got GPS in there and a SIM card.Yeah.And it knows the location of the boat, knows the battery voltage, it knows when the engine gets turned on by signatures in the voltage, so if the shore power's connected.Oh, clever.You can do perimeter alerts.Yeah.You know, the, the functionality that we're throwing into this, you know, is thick and fast.There's more being added to it.But it makes a boat owner have access to their boat and see where it is.You know, if you're sat at home in the middle of December and it's snowing, and you're like, "I wonder if the boat's okay-" Yeah"when there's a big storm coming through."It was windy last night.Yeah.Let's make sure it's still on its mooring.Exactly.Yeah.Swinging mooring's a perfect example.Yeah.But even, um, let's say you're in a marina and, you know, the shore power trips and no one knows about it, your battery starts, uh, depleting.Well, the batteries are the things that, uh, that power your bilge pumps on board.So if you've got a big storm coming through with rain, you want your batteries to be topped up, because you need your bilge pumps to work.Yeah.So you've now got peace of mind.And IYou know, we cater to different owners.Some are a little bit more nervous, like myself, about assets being out there.Yeah.But some are a little bit more reliant on it.But if you've got an app, like our customers do, that gives you pings when something's wrong, that is our proposition to say, you know, "Let's give you a tool that makes you a really good risk mitigator and risk manager yourself."Yeah.And again, it serves you both.You're a happier insurer, 'cause you know where the boat is and the state of it, and you've got a happier customer, 'cause they know where it is and the state of itExactly.That makes sense, yeah.Exactly, yeah.It's less claims, which is great for the insurers, but it's also great for the client.It's less hassle for them.They don't have to pay their excess when something goes wrong.And actually, they get more time using their boats.And as a whole, when we sort of take a step back, it's not big brother for us.Like, we, we try and help give you the tools, as a boat owner, to manage your, your, your vessel yourself.But we can still see everything on the grand scheme of things.We know, you know, how many hundred boats we've got in the UK, or how many tens of boats we've got, you know, in the Canaries.And those things help us, from a, a aggregate and exposure management, work out where our risks are.And if we've got a big, uh, event that happens in a marina, and there's a fire or something- Yeahyou know, we can deploy surveyors and adjusters straight away, and go down and help, and see what they can do to support the owners.And that's our level of sort of, uh, oversight that we have to support those owners.Yeah.I think that's really interesting, 'cause the, again, the scope of an insurance company is, I suppose, moving away from, "Yeah, okay, what are we ensuring?Okay, this, this, and this.Here's your, here's your policy wording, here's your everything else.Here's a couple documents.Phone down, done.Don't really hear from them unless something goes wrong," into actually quite proactively supporting the customer to reduce that risk, and- Yeah'cause everybody wins by that.Nobody wants their boat to set on fire.Nobody wants it to sink.And theYou, you see what I mean?Going from that kind of, "Yeah, it's done," into proactively going, "Okay, let, let's manage this.Let's support the customer properly."Yeah.Ex- I think the way to look at this is home and car insurance.You definitely just want your insurance documents, and then at renewal have another one.Because, you know, those are things that you have to mandatorily insure, um, if you've got a mortgage especially.But some, you know, some h- homes in different areas still need, you know, mandatory insurance.But boats are people's pride and joy.You love your boat.You know, you don't want an insurer who you don't have any claims with, so you just take your money, and then next year take your money, and next year take your money.And all they've done is send you a PDF document.Um- Yeah, there's something about it.It's just a bit, like, underserved, a bit like, "Eh."Exactly."Okay.Yeah, if I have to."Yeah.You'd, you'd like to think there's a relationship there.And you know, like, when I buy my car insurance, I don't talk to anyone.But when people buy their boat insurance, we love talking to them about their pride and joys.You know, we talk to them, "How long have you owned the boat?What things do you do with it?"And they get excited about it, as they should.I'm a boater myself, and I love to tell people about all the different sailing that I do.It just goes along with the part and parcel of being, you know, a passion-industry.And the one thing that we can do as insurers is to not make it about, "Here's a PDF document with your policy, and call us if anything's wrong," but, "Here's a little bit more of a partnership.You know, stay connected to your boat.Let's see what else we can give you from our side that we develop that's free to make your boat ownership journey, you know, that little bit better."Yeah.And it'll serve you well for the relationship, the retention, everything like that.It'll- I hope soall work.I hope so.Yeah.Yeah, it should do.We, we launched in September last year with Coast Insurance for the UK market.Okay.Um, at Palmer Boat Show this week, we've, uh, we've launched for the European market.So we're new.We're really, really fresh.Our insurers who support us is Comax Insurance.They're one of the, uh, the biggest UK insurers at the moment.They're AM Best A rated, which a lot of our, our customers care about, but it's a real sign of security behind the product that we're offering.Yeah.Um, because we only launched in September last year, we're still finding out what people's perceptions are, and we're gaining feedback, and we're talking to customers.We're trying to make the installation as easy as possible, but make sure that they also have a really good customer journey.Yeah.And, you know, we're, we're not gonna sort of, uh, um, pat ourselves on the back just yet about doing a good job, but everything's looking like we've come up with a really straightforward process that supports direct customers who come to us, but also the brokers.You know, a large part of our market is supporting brokers who, you know, they have, uh, the needs of clients themselves to look after.And, you know, if you go to your broker and you ask for an insurance product, our product should be one of the things that, you know, they've got access to, and they can distribute to them if, if, you know, if the broker thinks it's right and the customer thinks it's right.Superb.I have a closing question for you.What do you think is going to look outdated in the way insurers work today in 5 years' time?That's a great question.Um, I'm gonna- Goodtry and, uhI will check in with you in 5 years, so.Um, please do.I think there's some good accountability, um, opportunities here.Like, look, as an industry as a whole, insurance has always been very manual and, uh, you know, y- you know, manually driven, and you have to do things, um, as tasks, as individuals.AI's come in, it's changed a lot of that, um, from the simple things like, uh, getting your, your generative AI to come up with documents and analyze things in a different way- Yeahum, to, you know, how we're doing things now with our smart monitoring devices.I think the future is going to be a lot more usage based.You know, if you are a boat owner who goes out, 20 to 30 times a year, that's fantastic.You use your boat a lot.You really understand it.Um, you know, you're a confident boater- Yeahsimilar to, like, drivers who go out a lot.And we're gonna start working out, you know, those boats that never get used or those boats that get used, you know, 365 times a year.Yeah.Those are different risk profiles, and those are the ones that, you know, with a bit of smart technology, we'll be able to really create a product that is fair for every single boater.And, uh, so yeah, uh, hopefully we can mark these words.The future of insurance is, uh, is a lot more data driven based on what customers actually do.Superb.Marcel, thanks for coming on the podcast.Absolutely, pleasure.Pleasure speaking to you.Thanks for having me.Everybody, if you enjoy content like this, make sure you're following here to see plenty more of it.Thanks again to Hill Robinson for providing a wonderful venue on board motor yacht Sheer Gold here at the Palmer International Boat Show.All being well, we'll see you on the next podcast.Bye for now.