What’s happening in the world of marine insurance?

What’s happening in the world of marine insurance? | Insurance Business New Zealand

Marine

What’s happening in the world of marine insurance?

Trade body gives lowdown on current market trends

Marine

By
Terry Gangcuangco

The International Union of Marine Insurance (IUMI) has released its latest assessment of global marine insurance trends, pointing to continued growth across all lines of business.

Presenting the figures during its 150th annual conference in Berlin, IUMI noted that the global marine insurance premium base reached US$38.9 billion in 2023 – a 5.9% increase compared to the prior year. Growth was observed across the board, with offshore energy seeing a 4.6% rise, cargo insurance up by 6.2%, and ocean hull premiums expanding by 7.6%.

Cargo insurance held the largest share of the premium base at 56.9%, followed by ocean hull at 23.6%, offshore energy at 11.9%, and marine liability at 7.7%. Geographically, Europe remained the dominant market, securing 48.5% of global premiums, while Asia-Pacific held 28.1%, Latin America 10.9%, and North America 7%.

Notably, European premiums have been on an upward trend since 2019, and Asia has been recovering steadily since 2016. Both Latin and North America also showed modest growth in their premiums.

According to Astrid Seltmann, vice chair of IUMI’s facts & figures committee, several factors contributed to the growth.

“Global premiums reflect a combination of insurable volumes and prices per unit,” she noted. “The drivers for the increase in premiums are typically a continued rise in global trade volumes and values (cargo), coupled with increases in vessel values (hull), or the increase in oil price inducing more activity in the offshore energy segment.

“More widely, geopolitical conditions will have impacted premiums in a number of regions, as have general market conditions, specifically capacity. Overall, 2023 appears to have been a positive year for marine underwriters.”

Broken down by business line, offshore energy premiums grew by 4.6% in 2023, reaching US$4.6 billion. Lloyd’s and International Underwriting Association markets in the UK remained dominant, holding 28.2% and 36.8% market share, respectively.

Cargo insurance, representing a global premium base of US$22.1 billion, saw a 6.2% increase from 2022. All regions reported growth, with Europe accounting for the largest share at 39.8%, followed by Asia-Pacific at 32.2%. Cargo premium growth tends to align with global trade volumes, which have normalised following the disruptions caused by COVID-19.

The ocean hull sector reported premiums of US$9.2 billion in 2023, a 7.6% rise compared to the prior year. Europe commanded the largest share at 51.8%, followed by Asia-Pacific at 35.5%. A resurgence in shipping activity post-COVID boosted vessel values, particularly offshore support vessels, and helped to narrow the gap between the number of vessels and premiums.

Summing up the market’s performance, Jun Lin, chair of IUMI’s facts & figures committee, stated: “Overall, 2023 was a positive year for marine underwriters with market development seen across all lines of marine insurance business. World trade continued to grow which impacted positively on the global premium base, particularly for cargo insurance.”

Claims-wise, he pointed out that things were relatively moderate in 2023. Lin also added that while headwinds remain, the market is well-positioned to adapt.

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