As maritime insurers incorporate emissions data, climate risk could get priced into policies — and drive change
Environments globally and the economies that depend on them are changing rapidly — and insurance is often on the front lines of those changes. Coastal homes are becoming uninsurable in the face of more-frequent and more-severe hurricanes, typhoons, and other storms. In wildfire-prone regions such as California, some insurers have stopped renewing or issuing new fire policies. When it comes to the maritime sector, the insurance market is the proverbial tip of the spear for the businesses that comprise the global ocean economy.
With industrial fishing activities impacting more than half of the ocean and shipping transporting almost 90% of everything we make, buy, and sell, it’s no wonder that:
87% of marine ecosystems are now impacted by human activity
80% of all fish biomass has been lost over the past 100 years
Thousands of marine species are at risk of extinction this century
As sea life populations decline and marine ecosystems deteriorate, businesses across the maritime industry will see operational costs rise. To help them get ahead of the issue, new non-financial disclosure regulations aim to bring these previously hidden risks to light, so companies can address sustainability challenges before they become business liabilities.
Since most maritime supply chain operations are insured, the insurance sector holds significant leverage to help drive change while mitigating its own exposure to rising risks. Traditionally, insurers have relied on historical data to assess risk and set policy prices. But in a world where environmental conditions are shifting rapidly, past data is no longer a good predictor of future threats. A once-in-two-hundred-year catastrophe might now be just once-in-twenty.
To address this challenge, OceanMind has partnered with Concirrus AI to deliver detailed, comprehensive marine sustainability risk insights — beginning with emissions. This collaboration equips insurers with the tools they need to assess, price, and manage environmental risks more effectively in today's rapidly changing landscape.
Real-time data for better risk assessment
More than ever, insurers and reinsurers need current assessments that reflect today’s changing risk landscape — just as law enforcement needs current assessments of actual risk behaviour to enforce the law. By integrating real-time risk insights into cost and loss calculations, underwriters and actuaries can price premiums based on actual behavior rather than outdated historical trends.
This approach not only enables insurers to more accurately assess risk; it also encourages maritime operators to adopt safer practices in order to reduce premiums. As operators reduce high-risk behaviors, the overall impact on ocean health diminishes — and insurers benefit from fewer claims and lower costs related to environmental damage.
The key to maximizing this mutual benefit lies in creating stronger connections between compliance requirements and financial drivers.
Reinforcing compliance through financial accountability
Most of the damaging human activity on the ocean is already regulated. The damage persists where it is not effectively enforced. At OceanMind, we’ve been collaborating with regulatory agencies to provide the technology and support necessary to enhance compliance and protect marine environments. Our efforts have proven successful in the regions we’ve partnered with, but we know that enforcement alone is not enough.
Building on our established work in marine law enforcement support — where our advanced technology has been used to detect and prevent illegal fishing, monitor maritime emissions, and reduce harmful practices — we saw an opportunity to go even further. By extending our capabilities to support the insurance sector with data that helps mitigate risks before they escalate, we can create additional financial incentives that complement direct regulatory approaches.
As the landscape shifts, emerging financial regulations like the European Union’s Corporate Sustainability Reporting Directive and its Directive on Corporate Sustainability Due Diligence now provide insurers with a unique opportunity to directly address the source of much of the ocean’s damage: business supply chains.
By integrating sustainability data into insurance processes, companies are held to higher standards, promoting compliance and reducing the overall impact on the environment. This new regulatory approach aligns with the shift toward proactive risk management and provides a direct way for insurers to drive real, measurable change.
Expanding impact beyond insurance
Looking further ahead, the same insights can support broader financial services, allowing current risk behaviour to influence investment decisions and repayment terms. The greater the risk to future operations from unsustainable behaviour, the greater the cost of finance. And of course, the same risk insights can be used to help comply with corporate disclosure regulations.
OceanMind's real-time risk insights into maritime activities reveal the likelihood of damaging impacts to people and planet, empowering a new generation of risk managers to reduce operating costs while supporting sustainable and responsible business practices for years to come.
To learn more about OceanMind’s work and data, please get in touch today.