October 3, 2019 by Greg Meckbach
Sensors that gather data and feed it into computer systems could change the way engineering risks are assessed and underwritten by insurers, suggests Martin Thompson, president and CEO of RSA Canada.
“We are going data crazy,” Thompson said Thursday while kicking off the 46th Annual Engineering Insurance Conference (AEIC), held at Vantage Venues in downtown Toronto.
“We are going to move away from a traditional checklist-driven approach to engineering and safety, to much more data and many more sensors, which is going to give us far better insights into how we manage processes and aspects of technology,” Thompson said at AEIC, produced by the Canadian Boiler & Machinery Underwriters Association.
These sensors can allow greater underwriting sophistication, he suggested, alluding to devices that measure things like temperature, pressure, flow and acceleration.
“In my experience in engineering insurance, which I will add is very limited, traditionally it has been, I would say, sparse on data and very heavy on what I would call expert judgment,” said Thompson (pictured). “As we get a greater proliferation of data, how is that going to change how we think of underwriting, how we assess risk, how we price risk, and how we manage risk within the industry? Those are a bunch of things going on that will offer the opportunity for engineering insurance to advance quite materially in the future.”
Another opportunity is the transition to a lower carbon economy.
In Canada, one of the biggest opportunities in engineering insurance will be improving processes in the oil and gas sector, said Thompson.
“We now realize the impact that carbon has on our environment, so we have already seen, I think, within the engineering sphere, a big shift towards natural gas, solar and renewable energy. And I think that is a trend that will continue. My view is that the evolution is going to be quite significant in terms of industrial processes in terms of how we reduce carbon emissions from all those processes.”