The International Union of Marine Insurance (IUMI) has released its latest analysis, highlighting a dynamic year for the marine insurance sector. Global marine insurance premiums reached an estimated $40 billion in 2024, marking a 6% increase from 2022.
Global Premiums: Sustained Growth Across Sectors
The industry experienced growth across all lines of business:
Cargo Insurance: Maintained the largest share, with significant contributions to the overall premium base.
Ocean Hull Insurance: Continued its upward trajectory, reflecting increased vessel values and shipping activities.
Offshore Energy Insurance: Experienced growth driven by heightened activity in the offshore energy sector due to higher oil prices. BeInsure
Marine Liability Insurance: Remained a vital component, addressing the complex liabilities inherent in maritime operations.
Regionally, Europe sustained its dominance, commanding a significant share of global premiums, followed by Asia/Pacific, Latin America, North America, and other regions.
Key Growth Drivers in 2024
Several factors have contributed to the industry's growth:
Global Trade Expansion: The rise in global trade volumes and values has been a significant driver, particularly benefiting the cargo insurance sector. BeInsure
Increased Vessel Values: Higher demand for vessels has led to increased values, positively impacting ocean hull insurance premiums.
Offshore Energy Activity: Elevated oil prices have spurred activity in the offshore energy sector, contributing to premium growth.
Geopolitical Factors: Tensions and conflicts have led to the rerouting of shipping lanes, influencing risk assessments and insurance premiums.
Sector-Specific Highlights
Offshore Energy
The offshore energy market reported premiums of $4.6 billion in 2023, a 4.6% increase from the previous year. The UK maintained a dominant position, with the Lloyd’s and International Underwriting Association (IUA) markets accounting for significant shares. Stable oil prices have driven renewed activity, leading to positive market development. However, recent major losses have resulted in higher loss ratios, indicating a need for cautious optimism moving forward.
Cargo Insurance
Cargo insurance achieved a global premium base of $22.1 billion in 2023, marking a 6.2% improvement. All regions experienced growth, with Europe and Asia showing marked positive development. The International Monetary Fund predicts continued growth in world trade values, which bodes well for cargo underwriters. However, challenges such as large vessel fires, mis-declared cargoes, and geopolitical instability remain pertinent.
Ocean Hull Insurance
The ocean hull sector reported global premiums of $9.2 billion, representing a 7.6% increase from the previous year. Europe commanded the largest share, followed by Asia/Pacific. Post-COVID reactivation and increased vessel values have positively impacted this sector. However, an increase in claims, particularly from costly vessel fires, and inflationary impacts on repair costs suggest that 2023 loss ratios may be less favorable compared to recent years.
Future Outlook: Navigating Emerging Challenges
Looking ahead, the marine insurance industry faces several challenges:
Geopolitical Tensions: Ongoing conflicts and tensions continue to disrupt traditional shipping routes, necessitating adaptive risk management strategies.
Climate Change: Extreme weather events and the transition to zero-carbon fuel technologies present both risks and opportunities for the industry.
Technological Advancements: The rise of cyber risks and the adoption of new technologies require underwriters to stay ahead of potential vulnerabilities.
Jun Lin, Chair of IUMI’s Facts & Figures Committee, expressed confidence in the industry's resilience, stating that marine underwriters are well-prepared to embrace future changes with agility and expertise.
SRMG: Your Trusted Partner in Marine Risk Management
At SRMG, we understand the complexities of the evolving marine insurance landscape. Our tailored solutions are designed to help clients navigate emerging risks and safeguard their assets effectively. From bespoke cargo policies to comprehensive offshore energy coverage, SRMG offers unparalleled expertise to protect your maritime interests.
Explore our services and discover how we can enhance your risk management strategy by visiting www.srmg.co.
By staying at the forefront of industry trends and regulatory developments, SRMG empowers clients to thrive in a competitive and ever-changing environment. Together, we can chart a course toward a secure and prosperous future in the maritime industry.
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