Bringing together aviation and insurance experts
In March this year, experts from across the aviation and insurance industry made their way to Indonesia for the 21st WTW Aviation Conference. They were treated to two days of high-level and in-depth discussions about the role that insurance and risk management can play in enhancing efficiency, stability and progress in the aviation sector.
The theme of the 2024 conference was ‘How data drives behaviour’, and was reflected in the main agenda, which focused on the role that data can play in identifying, assessing and quantifying risks for the aviation industry.
The aviation industry generates a phenomenal amount of data. Every scheduled maintenance programme, passenger interaction, take-off, flight, and landing all generate data. Captain John Monks, Director of Safety and Security at British Airways, suggested that when caught in this deluge of data, the industry needs to keep sight of the fact that data is only as important as the insights it can provide. “We have to avoid simply picking data up because it’s there and then wondering what to do with it. It’s quite attractive to bring all of the data in and then try and work out what to do with it, but that can be very distracting” he said.
“You can present anything, in any way, and you can make it look really pretty, but the biggest question is always ‘so what’? What’s important about data is what can you do with it, how can you use it to enhance decisions for your organisation and reduce risk.”
Captain John Monks | Director of Safety and Security, British Airways
“You can present anything, in any way, and you can make it look really pretty, but the biggest question is always ‘so what’? What’s important about data is what can you do with it, how can you use it to enhance decisions for your organisation and reduce risk,” Monk continued.
Danny Ho, Chief Executive Vice President at EVA Air, reiterated that data for data’s sake can be a distraction, suggesting simply: “Without analytics, data means nothing.”
One of the best ways to unlock data’s value is to be able to compare it across organizations so that everyone involved can assess what is working and where improvements can be made. Aviation’s maturity and its range of trusted regional and global cross-industry organizations and relationships puts it in a good position to work collaboratively where appropriate. However, when data is shared, organisations must be clear about what they plan to do with it and careful in how they manage it.
According to Captain Jose R. Fernandez de la Morena, Associate Director of the Aviation Safety Partnership at WTW, there is plenty of willingness to share appropriate financial data, but more reticence where safety is involved. “From my experience, the industry is relatively open when it comes to financial data, but safety data is usually more protected,” he suggested.
In de la Morena’s experience, industry or risk management organizations that wish to access data to make cross-sector comparisons need to show that they can manage it responsibly. “One of the key points is how to protect data and ensure the balance between confidentiality and making the industry better,” he suggested. “We have to think about what happens if there is a leak, and we have to explain the measures that are in place to reduce that risk, because if we can show airlines that their data is secure, it will increase their confidence to share the data.”
There is little doubt that cross-industry networks gain huge value in the event of an incident or crisis. Whether it’s incidents at individual organisations or wider events such as COVID-19, the ability to share experiences and advice can make recovery quicker and more robust. This is one of the reasons why WTW continues to emphasise the importance of offering a forum, such as the Aviation Conference, where the industry can come together.
“Understanding the data that insurers need can help ensure that there is a balance between the art of underwriting and the science of underwriting,” observed EVA Air’s HO. “The data is there, but how it is utilized is becoming more and more important. How can we share it efficiently?”
This thread was picked up by Mark Searle, Global Director of Safety at IATA, who reflected briefly on some of the challenges that COVID-19 created and the importance of having good data but also strong understanding of its implications.
“The financial health and rapid management of change that airlines had to go through during the pandemic was obviously a challenge,” Searle said. “Most airlines did exceptionally well, but we worked to quickly identify any that looked like they might struggle and work with them to make sure that financial challenges didn’t impact safety. This is part of the art that has to be applied to data: the human interpretation, understanding, and conversation will always be critical.”
In light of recent global events, geopolitics, which has an impact on both aviation and insurance organisations but is well beyond the control of either industry, was also high on the agenda at the WTW conference.
Delivering an agile response to events can be a challenge for the unprepared, but robust data and efficient networks offer early warning systems and sounding-boards as situations evolve. Various speakers gave examples of where data had helped their organizations respond to events that could have lead to operation challenges.
“You need to have a good network to understand what is happening across the world.”
Bruce Carman | Chief Underwriting Officer HIVE Underwriters
The importance of the interplay between data, information, intelligence and insights came through with regards to geopolitics. “You need to have a good network to understand what is happening across the world,” observed Bruce Carman, Chief Underwriting Officer at HIVE Underwriters. “As an insurer, we have to make sure that we have the same intelligence as the airline operators we work with, and we have to have an ongoing dialogue to ensure that we agree what it means from a risk perspective. Sharing information and agreeing what it means is so important to defining and understanding risk.”
Delegates were also treated to insights from stakeholders across the aviation industry, with Datuk Captain Izham bin Ismail, Group Managing Director at Malaysia Aviation Group (MAG), Jennifer Torner, Humanitarian Programs Manager, Asia and the Pacific at Airlink, as well as renowned anthropologist Lawrence Blair all addressing the conference.
On the insurance and risk management side, there were presentations and discussions from representatives, and conference sponsors, from across sector including Atrium, Chubb, Everest Insurance International, Fidelis MGU, HFW, Liberty Specialty Markets, McLarens Aviation, Osprey Flight Solutions, and Starr Consulting Services.
“Data is one of the most important topics for both the aviation and insurance industries at the moment, but it is only as useful as the insights that it provides,” observes Adam Hemmingway, Executive Director, Global Aviation & Space. “This is why the 21st WTW Aviation Conference brought together such a broad array of experts from across aviation, risk management and beyond. The aviation industry has faced some unique challenges over the last few years, but one of the reasons for its relative success has been the healthy combination of competition and collaboration between organisations. The safety of customers has always been the primary consideration, and it is a privilege to be able to bring people together to discuss their perspectives on the industry.”
