The International Union of Marine Insurance (IUMI) released its 2024 “Stats Report” analysis of the global marine insurance market. As it is highlighted in the report, the 2023 insurance year was positive for marine underwriters with market development seen across all lines of business.
The global marine insurance premium base for 2023 was reported as $38.9 billion representing an uplift of 5.9% from the previous year.
Development was seen across all lines of business with the Offshore Energy sector enjoying a 4.6% increase, Cargo insurance 6.2% increase and Ocean Hull 7.6% increase.
Distribution of premiums had not changed significantly from 2022 with Cargo commanding the largest share at 56.9% followed by Ocean Hull (23.6%), Offshore Energy (11.9%) and Marine Liability (7.7%).
By region, Europe continued its dominance with a 48.5% share of global premiums followed by Asia/Pacific (28.1%), Latin America (10.9%), North America (7.0%) and the rest of world at 5.5%.
Interestingly, after a period of decline, European premiums had enjoyed an upward trend since 2019, and the Asian market had also continued its rally since its downward trend ended in 2016. Latin and North America were also showing a modest upswing in their premium base.
Global premiums in the Offshore Energy market were reported as $4.6 billion in 2023, a 4.6% uplift in 2022. The UK continued to dominate with the Lloyd’s and IUA markets accounting for a 28.2% and 36.8% share respectively.
Cargo insurance returned a global premium base for 2023 of $22.1 billion – a 6.2% improvement in 2022.
The Ocean Hull sector reported global premiums of $9.2 billion representing a 7.6% increase from the previous year.
Summing up, Jun Lin, chair of IUMI’s facts and figures committee said: “World trade continued to grow which impacted positively on the global premium base, particularly for cargo insurance. The oil price appears to have stabilised which is good for the offshore sector. Inflationary pressure has eased and many central banks are beginning to cut their interest rates.
“The claims environment was also relatively moderate in 2023 with no major weather events or vessel casualties making a significant impact on the overall costs, despite a few costly fires. Large vessel fires, particularly on containerships and car carriers, are still a major concern for hull and cargo insurers.
“Increasing geopolitical tensions are creating headwinds for our industry and there seems no end to their impact in 2024 or beyond. The continuing Houthi attacks in the Red Sea area and the Russia/Ukraine war are disrupting traditional shipping routes and causing some carriers to change the way they operate. And we must not forget the tragic loss of life suffered by seafarers in those regions. Re-routing vessels around Africa brings additional risks but, so far, we have not seen any significant issue. On the flip side, these longer routes, particularly for containerships, have absorbed the influx of newbuilds into the market ensuring freight rates remain stable.
“Other headwinds for 2024 and beyond will include the impact of the impending US election, climate change and associated extreme weather events, zero-carbon fuel technology and cyber-risks. But despite this, the marine insurance market has fared well in 2023 and I’m confident that marine underwriters will embrace future change with the same alacrity they’ve shown previously.”
